Private funeral insurance compared with the WINZ funeral grant

Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931) · Updated 2026-10-20 · Reviewed quarterly, when the underlying data is restated.

Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name.

The Work and Income Funeral Grant is means-tested and capped at $2,697.43 (as at 1 April 2026). Private funeral insurance pays a fixed benefit whatever your income, but Momentum Life's Funeral Insurance pays only for accidental death in the first 24 months. The grant is not a universal $10,000 payment, and having one can affect the other.

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Funeral cover See your price Ages 40–75 · $3k–$30k Life cover See your price Ages 18–65 · $50k–$300k

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Funeral cover: Only accidental death is covered for the first 2 years. Total premiums can add up to more than the cover, and it may not meet the whole cost of a funeral.

Life cover: Conditions you already have aren't covered for the first 2 years (premiums refunded instead). Suicide isn't covered for the first 2 years, and a few conditions can be excluded permanently.

Insurer: Momentum Life Limited. Financial strength rating B (Fair) from AM Best, affirmed 11 February 2026; B ratings sit in AM Best's 'vulnerable' range. The rating scale is available for inspection at every Momentum Life office in New Zealand. What this means

Already have cover? Keep it. New cover won't pay for a condition you already have in its first 2 years.

Opens Momentum Life's online application; its guidance only covers eligibility. QuoteHub is a Momentum Life partner. Smiths Insurance & KiwiSaver may receive a commission if you buy. General information, not advice.

The Work and Income Funeral Grant (often called the WINZ grant) is a one-off, non-taxable payment towards the cost of a funeral. It is paid only if the person's own estate, and in some cases the applicant's money, cannot meet the cost, and it has a maximum. Funeral insurance is a private contract: you pay premiums, and a chosen benefit is paid when the insured person dies, subject to the policy terms. Momentum Life's Funeral Insurance (issued by Momentum Life Limited) accepts New Zealanders aged 40 to 75 with no health questions and offers benefits from $3,000 to $30,000. The first 24 months pay only for accidental death within 90 days of the accident; any other death in that time pays nothing and all premiums for that person are refunded. This page compares the two on the facts, as at 20 October 2026.

The two at a glance

	Work and Income Funeral Grant	Momentum Life Funeral Insurance
What it is	A government payment, not repaid if the criteria are met	A private policy you pay premiums for
Maximum	$2,697.43 (as at 1 April 2026)	Benefit $3,000 to $30,000; accidental death pays three times the benefit
Means test	Yes: assets always, income for a partner or child	None
Health questions	None	None; acceptance is guaranteed for ages 40 to 75
Waiting period	None, but you apply after the death	First 24 months: accident only, otherwise premiums refunded
Who is paid	Paid against an itemised funeral account (receipt and bank details if you have already paid)	The policy owner, or the nominated beneficiary if the owner has died
Cost to you	Nothing	Premiums to the 89th birthday

Sources: Work and Income: Funeral Grant; Momentum Life: Funeral Insurance Policy Wording. Check both for current terms.

What is the Funeral Grant, and who qualifies?

Work and Income's page (updated 24 June 2026) says the grant is available when the person who died was your partner, your parent or guardian, your child under 18, or a single person over 18 whose funeral you are arranging. The deceased must have normally lived in New Zealand. It is non-taxable and does not have to be repaid when the criteria are met (Work and Income: Funeral Grant).

The tests depend on who died.

Income test. Only if the deceased was your partner or child. For a partner who has died, the applicant's annual income before tax must be under limits that range from $33,518.68 (aged 16 to 17, no children) to $49,248.68 (a parent with two or more children). For a child who has died, limits range from $33,518.68 to $55,954.08 (if you are in a relationship).
Asset test. If the deceased was not your partner or child, their assets are deducted from the funeral expenses. If they were your partner or child, the first $2,351.46 of your assets is ignored and the deceased's count. The grant is the lesser of the maximum or the unmet balance.

These are the figures on the page on 20 October 2026. They change, so check the page.

How much can the grant pay, and what are its limits?

The maximum is $2,697.43. FDANZ's 2026 report gives an average of $11,700 for a cremation funeral with 50 attendees, $14,300 with a burial, and $4,700 for an unattended cremation (FDANZ 2026 Industry Trends Report). By our arithmetic the maximum is 23% of the first, 19% of the second and 57% of the third. FDANZ also reports about 4,900 grants a year, with the average paid about 90% of the maximum. The grant is a contribution, not a funeral.

Other limits:

Allowed costs include funeral director fees, casket, death certificate, notices, hearse, burial and cremation fees, venue, food (including kai for a tangihanga), flowers, celebrant or clergy and a slideshow. Alcohol is generally not allowed (Work and Income: Essential funeral expenses).
No grant is paid if an ACC funeral grant, a Veterans' lump sum or a War Funeral Grant is payable (Work and Income). ACC's grant, for deaths from a covered injury, is up to $8,236.40 for funeral and memorial costs, set by the date of death (ACC).
There is no time limit to apply, and Work and Income may pay first and recover later if it cannot confirm income or assets.

You will need an application form, confirmation of the death, an itemised account and proof of identity. Our funeral grant guide covers the steps.

When does private funeral insurance pay more?

A policy can pay more than the grant in three situations. The benefit can be up to $30,000, against a $2,697.43 ceiling. It does not depend on the family's income or assets. And an accidental death pays three times the benefit, up to $90,000.

Against that:

The first 24 months. A death from illness in that time pays no benefit. See funeral insurance waiting periods.
Total premiums can exceed the benefit. The wording says the policy is not a savings or investment plan and that the benefit "may not cover the cost of a Life Insured's funeral". Our cost guide explains the pricing, and Momentum publishes no funeral premium.
Age. New applicants must be 40 to 75.
Payment. Momentum pays the policy owner (or the nominated beneficiary if the owner has died), not a funeral director.

Can you have both private cover and the grant?

Yes, but one can affect the other. Work and Income's manual lists cash assets as including life insurance proceeds and the total in a prepaid funeral account (Work and Income: Definition of assets), and the grant page says prepaid funeral cover can stop you getting the grant. Because the grant pays only the lesser of the maximum or the unmet balance, a benefit that meets the costs can leave nothing to claim. If the deceased was single with no children, their net equity in property also counts. We found no published rule on how a particular funeral insurance payout is treated in every case, so ask Work and Income before you rely on both. Do not assume the grant will make up a shortfall.

Which suits a family with limited savings?

There is no single answer. These are the questions to ask.

Is the grant likely to apply? If the person who died had few assets, the grant may be available, but it covers a fraction of a typical funeral.
Can the policy be kept up? Missed premiums for more than a month allow Momentum to cancel.
How old are you? If you are under 40 or over 75 you cannot apply for Momentum's Funeral Insurance.
Do you have other options? Setting money aside is another route; see funeral insurance versus saving. Some families also get help from iwi, trusts or charities; councils may bury or cremate a person free if they left too little (Burial and Cremation Act 1964, s49).
Is anyone claiming ACC? If the death was from a covered injury, ACC's grant comes first.

Work through is funeral insurance worth it next if you are weighing a policy. The funeral costs hub lists what costs what.

Where to get advice

Compared: the Work and Income Funeral Grant, the ACC funeral grant and Momentum Life's Funeral Insurance, on eligibility, amount and timing, as at 20 October 2026, from the documents cited. Not every source of funeral money is included. This is one adviser's reading, not a score. Momentum Life Limited has a financial strength rating of B (Fair) from A.M. Best, affirmed 11 February 2026; it sits in A.M. Best's "vulnerable" range on Momentum's own table, and the rating is not a recommendation (financial strength). The buttons on this page open Momentum Life's online application. QuoteHub is a Momentum Life partner and Smiths Insurance & KiwiSaver may receive a commission if you buy a Momentum policy; see how we are paid. Advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). Back to the funeral insurance hub or Momentum Funeral Cover.