Funeral cover for employees and groups

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.

Employers cannot buy Momentum Life's Funeral Insurance as a group scheme: its policy owner must be a natural person, not a business. What employers can arrange is group life cover through a licensed adviser, from around ten employees, which some insurers pair with an advance of up to $15,000 for funeral costs. Staff can apply for their own funeral policy.

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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.

Group funeral cover, in everyday use, means money available to an employee's family for a funeral through a workplace or membership arrangement. In New Zealand we found no standalone group funeral insurance product on the insurer pages reviewed for this page. The nearest thing is group life insurance, where the employer holds one policy covering the staff and the insurer accepts each eligible employee up to a pre-agreed limit without health questions. Funeral money then arrives as an advance paid early on the life benefit. A personal funeral policy works differently. It is bought by a person for themselves or for a relative, and each person applies, so the two should not be confused. This page sets out what is open to an employer or a group, what is not, and what to check.

Can a business or organisation get group funeral cover?

Yes, in the form of group life cover, and only through an insurer that offers a group scheme. Three insurers' pages, read on 20 October 2026, say this:

Chubb Life. Its group insurance page says "at least 10 employees", prices a scheme "typically around 1-3% of your total salary cost", and defines an Automatic Acceptance Level as "a pre-approved level of cover that's been determined for the group" (Chubb Life: Group insurance). The page does not mention a funeral benefit.
Asteron Life. Plans need "10 or more employees", are "usually around 1% of your total salary cost", and include "a funeral advancement payment of up to $15,000" (Asteron Life: Employee insurance).
Fidelity Life. Group life offers "automatic acceptance for all eligible employees under age 65" and says it can "arrange $15,000 immediately upon a death to cover funeral and other costs", which is deducted from the death benefit (Fidelity Life: Group life insurance).

Terms, limits and prices differ by insurer and by the staff list. Our guide to group life and income protection for employers and the comparison of group versus individual life insurance cover the detail. Not every insurer is included here.

Why can't a personal funeral policy be bought as a group scheme?

Because of who the policy is written for. Momentum Life's Funeral Insurance wording says the Policy Owner "must be a 'natural person' (not a business, corporation, or any similar organisation) and a New Zealander". A beneficiary must also be a natural person: Momentum "can't pay a Benefit directly to a company, charity or other organisation" (Momentum Life: Funeral Insurance Policy Wording, 17 August 2023). Cover is for people aged 40 to 75 who are New Zealanders (living in NZ and a citizen, permanent resident, or on a work visa for at least 12 months). A family policy covers up to four people who are partners or relatives of the owner. None of that fits an employer buying for staff.

So an individual product is not a group scheme, and we do not suggest otherwise. Employees can apply for their own policy, and the employer can point them to information. The Momentum Funeral Cover page sets out the product.

Group scheme or personal policy: the differences

	Group life with funeral advance	Individual funeral insurance (Momentum)
Who owns the policy	The employer	A person (a natural person)
Who applies	The employer arranges it through an adviser or insurer	Each person applies
Health questions	Eligible staff accepted up to the scheme's limit without them	None; acceptance is guaranteed for ages 40 to 75
Size	Set by the scheme; the funeral advance in the pages above is up to $15,000	$3,000 to $30,000
Early-death rule	Set by the scheme	First 24 months: accident only; other deaths refund all premiums
Leaving the job	Group cover is tied to the employer's policy	Cover continues if premiums are paid
Premiums	Paid by the employer in the plans we read (Asteron's page lists this as a requirement)	Paid by the policy owner to the 89th birthday
Total cost	Per scheme	Total premiums can exceed the benefit, which may not cover the whole funeral

How is employer-paid cover taxed?

Take advice from an accountant. Inland Revenue has published guidance on two cases. For a group insurance policy the employer owns and pays for, covering employees' term life and accident or medical cover, the employer will generally be entitled to a deduction for the premiums, the premiums are subject to fringe benefit tax (FBT), and a lump sum paid on death is not taxable income of the employee or their estate (Inland Revenue QB 17/10, 20 December 2017). If instead the employee owns a term life policy and the employer pays the premiums, the premiums are treated as salary or wages and subject to PAYE (FBT does not apply), and lump sum claims are not taxable (Inland Revenue QB 18/02).

Both items concern term life cover (QB 17/10 also covers accident and medical cover). We have not seen Inland Revenue guidance on an employer paying for a personal funeral policy or on a particular scheme design, so treat both as general information, not tax advice, and ask an accountant before an employer pays staff premiums.

What happens when an employee leaves?

Group cover is tied to the employer's policy, so it does not automatically follow the employee. Fidelity Life says employees "can choose to continue their cover privately when they cease employment", subject to conditions that include returning the application within 45 days (Fidelity Life: Group life insurance). Asteron Life's pages mention a continuation benefit that lets an employee keep cover through a personal policy without further medical underwriting (Asteron Life). Ask any scheme about its deadline before you buy. A personal funeral policy, by contrast, stays with the person while premiums are paid.

What can an employer do about funerals today?

Set up a group scheme through a licensed adviser, who can quote against the staff list. QuoteHub's page on workplace funeral support covers leave and practical help.
Know the leave rules. The Holidays Act 2003 gives 3 days' bereavement leave for the death of a spouse or partner, parent, child, sibling, grandparent, grandchild or a spouse's or partner's parent, and 1 day for others where the employer accepts a bereavement (Employment New Zealand). The Employment Leave Act is due to replace the Holidays Act from 6 August 2028 (Employment New Zealand).
Point staff to personal options. For ages 40 to 75, see guaranteed acceptance cover and how funeral insurance works.

Membership schemes exist elsewhere. For example, an AIA funeral plan was sold to New Zealand Defence Force members through Aon, with entry ages 50 to 80 and $7,500 to $15,000 of cover, but the leaflet we found is dated September 2019 and we could not confirm it is open today (AIA leaflet). Do not treat it as a retail option.

Where to get advice

Compared: group life schemes from Chubb Life, Asteron Life and Fidelity Life, and Momentum Life's individual Funeral Insurance, on the points above, as at 20 October 2026, from their own pages. Not every insurer is included. This is one adviser's reading, not a score. The buttons on this page open Momentum Life's online application for an individual. Momentum Life Limited has a financial strength rating of B (Fair) from A.M. Best, affirmed 11 February 2026; B sits in A.M. Best's "vulnerable" range on Momentum's own table, and the rating is not a recommendation (financial strength). 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). For a scheme for your business, speak to a licensed adviser. Back to the funeral insurance hub. For life cover costs, see how much life insurance costs.