How funeral insurance works from application to claim

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.

Funeral insurance pays a lump sum, the funeral benefit, when the insured person dies, as long as the policy is in force. Momentum Life's Funeral Insurance accepts New Zealanders aged 40 to 75, offers $3,000 to $30,000, and keeps the annual premium rate fixed until the 89th birthday unless tax law or claims experience changes. In the first 24 months only accidental death is paid; for any other death premiums are refunded. A 30-day free look applies.

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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.

Funeral insurance is a life insurance product with a small, fixed sum, designed to be paid quickly after a death. It is not a savings or investment plan. You pay premiums, and a nominated person receives the benefit when the insured person dies. The funeral benefit is the lump sum shown on the policy schedule: it is not tied to the actual cost of the funeral, and it is paid to a person, not to the funeral director. Momentum's product is guaranteed acceptance, which means no medicals, health questions or paperwork to get cover. That feature is the usual reason for an early-period rule. This page follows a policy from application to claim, using Momentum's wording of 17 August 2023, and flags where the total premiums can exceed what is paid out.

Step 1: Who can apply?

Momentum's Funeral Insurance accepts "New Zealanders" aged 40 to 75. The wording defines that as a person living in New Zealand at the time of application who is a New Zealand or Australian citizen, holds a New Zealand permanent residency visa, or has been in New Zealand continuously for at least 12 months on a valid temporary work visa (Momentum Life: Funeral Insurance Policy Wording).

Single or family. A single policy covers the owner or one partner or relative. A family policy covers up to four people, each a partner or relative of the owner. A relative includes a parent, grandparent, sibling, uncle, aunt, nephew, niece or child of the owner or the owner's partner. An adult child can therefore own a policy on a parent.
The owner is a person. Policy Owners must be natural people, not businesses. See group funeral cover.
Over 75. Momentum does not accept new applicants over 75.

Step 2: Choose a benefit

The benefit is $3,000 to $30,000. The most Momentum will pay for one person across all its funeral policies is $30,000. If someone holds more than one, the excess is cut from the newest policy and its premiums refunded. If death is the direct result of an accident and occurs within 90 days of it, the policy pays three times the benefit, $9,000 to $90,000. The wording says the benefit "may not cover the cost of a Life Insured's funeral". FDANZ's 2026 report puts an average attended funeral for 50 people at $11,700 with a cremation and $14,300 with a burial (FDANZ 2026 Industry Trends Report), so see our funeral insurance cost guide and the basics in what is funeral insurance when choosing an amount.

Step 3: Premiums, from start to the 89th birthday

You pay fortnightly, monthly or annually. Card payments carry a processing fee. Each insured person's premium rate stays the same each year until their 89th birthday, when premium payments end and cover continues for life. Cover for a person ends when a benefit is paid for them, and the whole policy ends when the last benefit is paid. The wording does not spell out how premiums are handled after a death, so tell Momentum promptly and ask. Additional insured people get a $150 discount each year.

There are limits to "fixed". Momentum can change the premium rate for everyone on the same offer only because of a change in tax or other legislation, or because claims experience is significantly different from expected. It gives at least 30 days' written notice, and the change takes effect from the next policy anniversary. If you increase a benefit or add a person, the premium on the addition is based on Momentum's rates at the time.

Momentum publishes no funeral premium, so we print none. Because you may pay for decades, total premiums can exceed the benefit. Divide the benefit by your monthly premium to see how many months of payments equal it, and see funeral insurance versus saving.

Step 4: The 30-day free look and the first 24 months

You have 30 days from the Acceptance Date to cancel with a full refund of premiums, provided no claim has been made. Cancelling after that period means no refund.

The first 24 months are limited. Momentum pays only if the person dies as the direct result of an accident and the death occurs within 90 days of it. A death from anything else in that time pays no benefit and all premiums paid for that person are refunded. After 24 months it pays for death from any cause. An increase or an added person starts its own 24-month period. The wording lists no pre-existing-condition clause and no separate suicide clause. Waiting periods has worked examples, and exclusions lists what the wording does and does not rule out.

Step 5: Staying covered, cancelling and lapsing

Event	What the wording says
You cancel	Give 30 days' notice. Premiums already paid are lost, and you must reapply if you change your mind
You stop paying	If a premium is unpaid for more than one month, Momentum may cancel after written notice
Reinstatement	You can apply to reinstate; outstanding premiums must be paid and reinstatement is not guaranteed
The policy ends	When you cancel, when Momentum cancels for non-payment, or when the last benefit is paid
Cover ends for one person	When you remove them or when a benefit is paid for them

More in lapse rules. Cover applies worldwide if the person was a New Zealander when it was issued.

Step 6: Making a claim

The owner, a nominated beneficiary or the executor contacts Momentum. A claim form can be downloaded from Momentum's website or sent to you. The claimant supplies proof at their own expense, which may include a form from a medical practitioner, other medical information and a death certificate. Claims are on 0800 108 108 or [email protected], Monday to Friday 9am to 5pm (Momentum Life: Claims).

Momentum will not pay a claim unless all premiums due are paid and the policy has not been cancelled. Valid claims are paid in New Zealand dollars "usually within 24 - 48 hours of approval". The clock starts at approval, not the death. Payment goes to the policy owner, or if the owner has died, to the nominated beneficiaries, or failing that to the executor. A beneficiary must be a natural person. Momentum "can't pay a Benefit directly to a company, charity or other organisation", so a funeral director cannot be named. Disputes go to Momentum, then to the Insurance & Financial Services Ombudsman (IFSO), whose assessment is binding on Momentum. See how to claim funeral insurance.

How does it differ from a prepaid funeral?

Funeral insurance pays a sum to a person after a death, and nothing is set aside for a specific funeral. A prepaid plan holds money, with a trust or funeral director, for the funeral itself. Compare them in funeral insurance versus a prepaid funeral.

Who it suits, and who it does not

It may suit someone aged 40 to 75 who cannot or does not want to answer health questions and who accepts the early period and the long premium run. It may not suit someone who can save the cost, someone who expects to live well past the break-even point, or someone for whom a death from illness in the first two years would be the main worry. Fully underwritten life cover through a licensed adviser is worth comparing if you can answer health questions.

Where to get advice

The buttons on this page open Momentum Life's online application. 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). Back to the funeral insurance hub or Momentum Funeral Cover.