Muslim funeral insurance in NZ: what to consider
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.
Whether a conventional funeral insurance policy fits Islamic principles is a religious question, and QuoteHub does not answer it. A qualified scholar should. Momentum Life's Funeral Insurance is a conventional product, and we have not seen Momentum describe it as Sharia-compliant. This page sets out how it works, so you can ask informed questions.
A funeral insurance policy pays a fixed benefit of $3,000 to $30,000 towards costs, not the whole funeral. Momentum's policy takes applicants aged 40 to 75 without health questions. In the first 24 months it pays only if death is an accident within 90 days of it. Any other death in that window pays nothing and returns the premiums. The benefit is paid to the policy owner or a named person after a claim is approved, "usually within 24 - 48 hours of approval", so it will not usually arrive in time for a burial arranged within a day or two of a death. If your family expects a quick burial, the money has to come from somewhere else first.
The religious question
You may have arrived with questions about uncertainty (gharar) and interest (riba) in insurance. We cite no ruling on them, and we do not say any policy is permitted or forbidden. Scholars and communities hold different views, and the answer for your family belongs with a scholar you trust. Take them the facts in the next section, because the details of a policy matter to the question.
In the sources we checked, we found no funeral cover in New Zealand that is described as takaful (the term used for Islamic-model cover). That is not proof that none exists. If you want one, ask a licensed adviser and your scholar whether there is a product that fits.
What a conventional funeral policy does
These are the features of Momentum Life's Funeral Insurance, from its policy wording (issue date 17 August 2023). Other insurers' policies differ in detail but share the broad shape.
- Fixed benefit, set when you apply. You choose $3,000 to $30,000. Accidental death pays three times the benefit.
- Premiums over time. The premium rate is fixed each year until the insured person's 89th birthday, when payments stop and cover continues for life. The policy "is not a savings or investment plan". If you cancel, you lose the premiums already paid, apart from a full refund within 30 days of the acceptance date if no claim has been made.
- An outcome nobody can predict. A person who dies after 24 months is paid the benefit, which may be smaller or larger than the premiums paid. Total premiums could exceed the benefit if you pay for many years, and the benefit may not cover a whole funeral.
- The first 24 months. Only an accident pays. Any other death returns all premiums for that person, with no benefit.
- Who is paid. The benefit goes to the policy owner, or if the owner has died to the nominated beneficiary, or otherwise the executor. The beneficiary must be a person. Momentum "can't pay a Benefit directly to a company, charity or other organisation", so a funeral director cannot be named.
- No terminal illness benefit, and card payments carry a processing fee.
A scholar may also want to know what the insurer does with premiums before claims. Momentum publishes no such detail on the pages we read, so we cannot tell you.
Why speed matters in New Zealand
For some families the timing of a funeral is set by religious belief. The Funeral Directors Association of New Zealand says "religious beliefs decide the timings for some people" (FDANZ: Funeral and farewell choices). For a burial in a New Zealand council cemetery, the practical steps are these (Community Law: Burials, legal requirements):
- Complete the council's burial application form.
- Show the council the certificate of cause of death from a doctor or nurse, or a coroner's order for disposal of the body.
- Contact the council at least 24 hours before the burial to choose a plot. In urgent cases you may be able to arrange a plot on the same day if you call early.
- Pay for the plot immediately, or give the council proof that Work and Income or ACC will pay through a funeral grant.
- The District Court must be notified about the burial, including the cause of death.
Step 4 is where the money problem arises. An insurance claim needs proof of death and then approval, so it will not usually be in your account in time. Savings, a family contribution or a grant approval are the sources that move quickly.
What it costs
These are published council fees, as printed on 20 October 2026, and they change.
| Item | Fee |
|---|---|
| Auckland Council, Manukau Memorial Gardens, Muslim areas (Sections 17, 18, 18 extension): adult burial right | $5,980 |
| Auckland, Manukau: burial on a Saturday, Sunday or public holiday | $515, $1,235 and $2,060 extra |
| Auckland, Manukau: burial after 3.30pm | $585 extra |
| Wellington City Council, Mākara: Muslim boards, adult / child | $214 / $115 |
| Wellington: funerals booked after 3.15pm | $251 extra |
A full funeral with burial for 50 guests averages $14,300 across FDANZ's members, and the 2025 average council burial fees on a 15-council sample were $4,865 (FDANZ, 2026 New Zealand Funeral Industry Trends Report). A funeral director can give an itemised estimate before you commit. See our funeral cost guide.
Ways to fund a burial other than insurance
- Savings and family contributions. Whether a mosque or an Islamic association in your area runs a community fund is a question for them. We found no source for one.
- Work and Income Funeral Grant. Up to $2,697.43, subject to income and asset tests in some cases. Work and Income's guidance on reasonable funeral expenses includes cultural, spiritual or religious practices (Work and Income: essential funeral expenses). Prepaid funeral cover can stop you getting it (Work and Income: Funeral Grant).
- ACC. A funeral grant of up to $8,236.40 is available if the death is from a covered injury (ACC: Financial support after a death).
- The deceased's bank account. The bank can release money for the funeral without waiting for probate (govt.nz: What to do when someone dies).
- A prepaid funeral plan. Now For Them, run by The Funeral Trust Services Limited (FDANZ), says it is "not a savings or investment product, and no interest or return is paid" (FDANZ: What is Now For Them). The older Funeral Trust FAQ says funds "may earn interest", so check current terms. See funeral insurance versus a prepaid funeral.
Questions to ask
Ask your scholar whether a conventional funeral policy, or a prepaid plan, is acceptable to you, and how a refund of premiums should be seen. Ask a licensed adviser what is available at your age, what happens to premiums in the first 24 months, and whether any takaful-style cover is sold in New Zealand. Ask a funeral director for an itemised estimate and how quickly a burial can be arranged. The hub has more on what to do when someone dies and funeral costs.
Where to get advice
The buttons on this page open Momentum Life's online application. They are shown on every funeral page, and nothing here suggests that Momentum's product is suitable for you on religious grounds. Momentum's A.M. Best rating is B (Fair), which Momentum's own table places in its "Vulnerable" range; see its financial strength page. 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 read about Momentum Funeral Cover.
Adviser's view
Whether a conventional funeral insurance policy is acceptable is a religious question, and a qualified scholar should answer it, not an insurer or an adviser. What we can say is how the product works, that it will not put cash in your hands within days of a death, and that savings, family contributions, a prepaid plan and Work and Income or ACC grants are the other ways to fund a burial.
Talk to a licensed adviser about funeral cover · free, no obligation.
Cite this page QuoteHub NZ (2026). Muslim Funeral Insurance NZ: What to Consider. www.quotehub.co.nz/funeral-insurance/muslim-funeral-insurance-nz. Updated 2026-10-20.
References
- Momentum Life: Funeral Insurance Policy Wording (PDF, issue date 17 August 2023)
- Momentum Life: Financial strength
- Community Law: Burials, legal requirements
- FDANZ: Funeral and farewell choices
- FDANZ: 2026 New Zealand Funeral Industry Trends Report (PDF)
- FDANZ: What is Now For Them
- Auckland Council: Cemetery fees and charges
- Wellington City Council: Mākara Cemetery fees
- Work and Income: Funeral Grant
- Work and Income: Essential funeral expenses
- ACC: Financial support after a death
- govt.nz: What to do when someone dies
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