Is funeral insurance worth it for you?
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 can be worth it for people who want a simple, guaranteed-acceptance policy and will keep paying for it, but it has real trade-offs. Momentum Life's Funeral Insurance pays a fixed benefit of $3,000 to $30,000 towards costs. Total premiums can exceed the benefit, the benefit may not cover a whole funeral, and the first 24 months pay only for accidental death. Whether it is worth it depends on your age, the premium, and the alternatives you have.
What you are really buying
Funeral insurance is a small whole-of-life policy that puts a lump sum in the hands of whoever arranges the funeral. Momentum Life's version accepts New Zealanders aged 40 to 75 with no health questions. You pay a level premium until your 89th birthday, and then you stop paying and the cover continues for life. In exchange, you accept a wait: for the first 24 months, only a death caused by an accident, within 90 days of it, pays (three times the benefit). For any other death in that time no benefit is paid and all the premiums for that person are refunded. After 24 months the benefit is paid for death from any cause.
That is the whole trade. You get certainty about acceptance and a payout in place of a decision to save. You give up flexibility, and over a long life you may pay more than you receive.
What are the main disadvantages?
- Total premiums can pass the benefit. Momentum's own wording says so, and IFSO has said insurers should warn buyers plainly.
- The benefit may not cover the funeral. FDANZ's 2026 report puts a full funeral for 50 guests at $11,700 for a cremation and $14,300 for a burial, and an unattended cremation at $4,700 (FDANZ 2026 report).
- The first 24 months pay only for accidents. If you may need the money soon, the policy will not help you.
- You lose what you paid if you stop. After the 30-day free look from the acceptance date, cancelling means no refund.
- Premiums can change. For everyone on the same offer, for a change in tax law or claims experience, on 30 days' notice.
- The insurer's rating is B (Fair). A.M. Best affirmed Momentum Life Limited at B (Fair) on 11 February 2026. Momentum's own table puts B in its "Vulnerable" range. The rating is not a recommendation and is not a statement that a claim will go unpaid (Momentum Life: Financial Strength).
Can total premiums exceed the benefit? A break-even table
Momentum publishes no funeral premium, and QuoteHub does not print an exact premium for any insurer, so this table works the other way round. It shows the monthly premium at which the total you have paid equals the benefit by the age you die. If your quote is higher than the figure in a cell, and you reach that age, you will have paid more than the benefit by then. All figures are simple arithmetic on round numbers, ignoring interest, inflation and any card payment fee.
Monthly premium at which total premiums paid equal the benefit:
| Start age | Benefit | By 75 | By 80 | By 85 | By 89 (premiums stop) |
|---|---|---|---|---|---|
| 50 | $10,000 | $33 | $28 | $24 | $21 |
| 60 | $10,000 | $56 | $42 | $33 | $29 |
| 70 | $10,000 | $167 | $83 | $56 | $44 |
| 50 | $30,000 | $100 | $83 | $71 | $64 |
| 60 | $30,000 | $167 | $125 | $100 | $86 |
| 70 | $30,000 | $500 | $250 | $167 | $132 |
How to read it: if you start at 60 with a $10,000 benefit and your quote were an imagined $480 a year, the total you have paid passes $10,000 a little after 80 (the table's $42 a month is the break-even at 80, which is $504 a year, so $480 a year falls just short of it at that age). Because Momentum's premiums stop at 89, and provided the rate does not change, the number you pay in total cannot exceed your premium multiplied by the years from your start age to 89. Anyone who lives past 89 pays nothing more. Work it out with your own quote, or use our break-even calculator.
The table cuts both ways. Someone who dies at 70 after starting at 60 has paid ten years of premiums for a benefit paid in full, which is well ahead. Someone who lives to 90 has paid for 29 years. Nobody knows which they will be, and that uncertainty is the thing you are paying to remove.
Does the benefit cover a whole funeral? Is $5,000 enough?
Against FDANZ's averages, $5,000 would meet an unattended cremation ($4,700) but would fall well short of a funeral with a service ($11,700 for a cremation, $14,300 for a burial). $10,000 is still the most common deposit in FDANZ's funeral trust, yet FDANZ says it is now "well below" a modest attended funeral. A $30,000 benefit would meet either with room to spare, at a much higher premium. The right size depends on which funeral you want and what else will be available; see how much funeral cover you need. The benefit is a contribution towards costs, not a promise that every cost is met.
What are the alternatives?
Compared: Momentum Life's Funeral Insurance against four other ways to meet a funeral bill, on cost, timing and flexibility, as at 20 October 2026, from Momentum's wording, FDANZ, Consumer NZ and Work and Income. Not every New Zealand insurer is included (see the comparison of the options). This is QuoteHub's reading of the facts, not a score.
| Option | Cost to you | Money available when | Main limit |
|---|---|---|---|
| Momentum Funeral Insurance | Level premium to 89 | Accident from day one; any cause after 24 months | Premiums can pass the benefit; loses premiums if cancelled |
| Savings account | Nothing but the discipline | Immediately, subject to access after death | You must actually save it |
| Prepaid funeral plan | A set sum in advance | At the funeral, with that provider | Money can be locked in; check fees and failure terms |
| Work and Income Funeral Grant | Nothing | After applying | Up to $2,697.43, tested against income and assets, and prepaid funeral cover can stop it |
| Life cover with a funeral advance | Premiums on a larger policy | Some policies release part of the sum early | Needs health questions, and may be declined |
See funeral insurance versus a prepaid plan and versus saving for the detail. Consumer NZ's research found funeral insurance to be "poor value for money", and it suggests a savings account as an alternative (Consumer NZ: 5 ways to pay for your funeral).
Who might still choose funeral cover?
- People who expect to be declined, or loaded heavily, for other cover.
- People who know they would not save the money on their own.
- Adult children paying for a parent's policy: Momentum allows a relative to own the policy on a parent aged 40 to 75.
- People who prefer to pay a small amount each month rather than hold a lump sum.
People who can set the money aside, who may need it within two years, or who are over 75 (Momentum takes no new applicants above that) are in a different position.
How do you decide?
- Name the gap. Funeral you want, minus money that will be available quickly.
- Get a quote at that benefit, and at one smaller amount.
- Do the sum. Premium times 12, times years to 89. Compare it with the benefit.
- Ask what happens if you stop. You lose the premiums.
- Compare with saving the same amount each month into an account.
- Check your timeline. If you may need the cover in two years, choose something else.
If after those steps you still want certainty without health questions, the policy may be worth it for you. If not, it probably is not. See what funeral insurance costs, what funeral insurance is and funeral insurance quotes.
Where to get advice
General information, not personal advice. The buttons on this page open Momentum Life's online application, one option among many. 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. If you have a complaint about a Momentum policy, contact Momentum first (0800 108 108); if it is not resolved, the free Insurance & Financial Services Ombudsman Scheme (IFSO, 0800 888 202) can assess it, and its assessment is binding on Momentum. A licensed adviser can compare funeral cover with fully underwritten life cover on your details. 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 Life Funeral Cover.
Adviser's view
Funeral insurance may suit a narrow group: people who want a modest sum in place without health questions, would not otherwise set the money aside, and can keep paying for years. It is a poor fit if you may need the money within two years, or if you can save the sum yourself. The deciding number is your premium multiplied by the years you will pay it.
Talk to a licensed adviser about funeral cover · free, no obligation.
Cite this page QuoteHub NZ (2026). Is Funeral Insurance Worth It NZ? Costs and Trade-offs. www.quotehub.co.nz/funeral-insurance/is-funeral-insurance-worth-it-nz. Updated 2026-10-20.
References
- Momentum Life: Funeral Insurance Policy Wording (PDF, issue date 17 August 2023)
- Momentum Life: Financial Strength
- FDANZ: 2026 New Zealand Funeral Industry Trends Report (PDF)
- Consumer NZ: 5 ways to pay for your funeral
- IFSO: Funeral insurance, what consumers need to know
- Work and Income: Funeral Grant
Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Free Will.