What is funeral insurance?
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 is a small life insurance policy that pays a fixed lump sum when the person insured dies, to help with funeral costs. In New Zealand it is usually sold without health questions. Momentum Life's version accepts ages 40 to 75, pays $3,000 to $30,000, pays three times that for an accidental death, and refunds premiums if death from illness happens in the first 24 months.
In New Zealand, funeral insurance means a whole-of-life policy with a small, fixed benefit, bought to put money in the hands of the people paying for your funeral. Most products are sold on guaranteed acceptance: the insurer asks no health questions, so it limits its risk with an early-death window. For a set period after the policy starts, only an accidental death is paid, and for most insurers the premiums are refunded if you die of anything else. After that period, a death from any cause pays the benefit. You pay premiums regularly, and the price depends on your age and the amount you choose. The benefit goes to a person you nominate, or to the policy owner or the owner's executor. It is a lump sum paid to a person, not a payment to a funeral director. Total premiums can end up larger than the benefit, and the benefit may not cover the whole funeral.
How it works, step by step
- You choose an amount. With Momentum Life it is $3,000 to $30,000 per person.
- You pay premiums. Fortnightly, monthly or yearly. Momentum Life's premium rate is fixed each year until the person's 89th birthday, when payments stop and cover continues for life. Other insurers stop at different ages (see below).
- The early-death window runs. Momentum Life pays only for accidental death in the first 24 months, at three times the benefit if the person dies within 90 days of the accident. Any other death in that time pays no benefit, and all premiums for that person are refunded. After 24 months, death from any cause pays the benefit.
- A claim is made. The claimant sends proof, which can include a death certificate and a form completed by a medical practitioner. Momentum Life says valid claims are usually paid within 24 to 48 hours of approval. Approval starts the clock, not the death.
The names people search for
People searching for funeral insurance use several terms, and not all are product names used by New Zealand insurers. This table maps them to what is sold here.
| Term you may see | What it means here |
|---|---|
| Funeral insurance, funeral cover | The usual NZ product names, for example Momentum Life Funeral Insurance, AA Life Funeral Cover and Chubb Life Funeral Cover |
| Funeral plan | Can mean two things. Greenwich Life sells insurance called "The Funeral Plan". A prepaid funeral plan, held with a funeral director or a trust, is a different product: you pay in advance rather than insure |
| Burial insurance, funeral and burial insurance | A search phrase for the same job. The policy pays a lump sum, not a burial or cremation as such. See burial insurance in NZ |
| Final expense insurance, final expenses | A search term. We found no NZ product on this page sold under that name. See final expense insurance in NZ |
| Funeral protection plan | Not a standard product name; check whether it is insurance or a prepaid plan |
| Life insurance with funeral cover | Ordinary life policies that advance part of the sum insured early for funeral costs. They are a different product |
How it differs from life insurance
| Funeral insurance (Momentum Life) | Life insurance (Momentum's Quick Life, guaranteed acceptance) | Fully underwritten life cover | |
|---|---|---|---|
| Purpose | A small lump sum towards funeral costs | Larger cover for debts and dependants | Larger cover for debts and dependants |
| Amount | $3,000 to $30,000 | $50,000 to $300,000 | Set by your needs and underwriting |
| Health questions | None | None | Yes, through an adviser |
| Early window | 24 months, accident only; other deaths refund premiums | 2 years, pre-existing conditions and suicide excluded | Depends on the insurer and your underwriting |
| Premiums | Fixed to the 89th birthday, then none | Stepped each year to 75, then fixed | Stepped or level |
| Entry ages | 40 to 75 | 18 to 65 | Varies |
A healthy person can usually get more cover for less with fully underwritten life cover through a licensed adviser. Guaranteed acceptance suits people who might be declined or loaded elsewhere, or who want cover without questions. For the longer comparison see funeral insurance versus life insurance.
What a typical NZ funeral policy pays
Details are from each provider's own pages, retrieved 17 to 20 October 2026. Check current terms before you apply.
| Provider | Entry ages | Benefit | Accident-only window |
|---|---|---|---|
| Momentum Life | 40 to 75 | $3,000 to $30,000 | 24 months |
| NZ Seniors and OneChoice (Pinnacle Life) | 18 to 79 | $3,000 to $30,000 | 12 months |
| AA Life (Asteron Life) | 50 to 79 | $5,000 to $30,000 | 24 months |
| Chubb Life | 50 to 80 | Up to $30,000 | 24 months |
| Greenwich Life, The Funeral Plan | 30 to 70 | $5,000 to $20,000 | 24 months |
Accidental death pays three times the benefit at Momentum Life, NZ Seniors and OneChoice, double at AA Life and the sum insured at Chubb. See the cost guide and the waiting periods guide for detail. Price differs by age and amount, and only AA publishes one, for a single profile, so ask for written figures from each insurer.
Who can buy it
Eligibility is set by each insurer. For Momentum Life, the policy owner must be a natural person who is a New Zealander, which in the wording means living in New Zealand at application and being an NZ or Australian citizen, a permanent resident visa holder, or someone continuously in New Zealand for at least 12 months on a valid temporary work visa. The person insured must be aged 40 to 75, and a family policy takes up to four people. An adult child can own a policy on a parent, because the wording counts a parent as a relative of the owner. Momentum Life's Funeral Insurance does not accept new applicants over 75; other insurers go up to 79 or 80.
Limits to read before you buy
- The early-death window. For the first 24 months with Momentum Life, a death from illness pays no benefit.
- The accident test. The wording requires the injury to be "directly and solely" caused by an accident, with death within 90 days.
- Premiums can exceed the benefit. The wording says so in terms. See when premiums stop.
- The benefit may not cover the funeral. FDANZ's 2026 report puts a full funeral with 50 guests at $11,700 for a cremation and $14,300 for a burial (FDANZ).
- Cancelling loses the premiums. After the 30-day free look, cancelling Momentum Life's policy means you lose the benefit of premiums already paid.
- Premiums can change. Momentum Life can change premiums for everyone on the plan for a change in tax or other law, or claims experience that is significantly different from expected, on 30 days' written notice.
- No terminal illness benefit on Momentum Life's Funeral Insurance.
If funeral insurance may not be the right tool
Savings, a prepaid funeral plan and fully underwritten life cover are alternatives. The Work and Income Funeral Grant is up to $2,697.43, income and asset tested for some claimants, and prepaid funeral cover can affect eligibility (Work and Income: Funeral Grant). Our guide to whether funeral insurance is worth it sets out the trade-offs, and the funeral insurance FAQs answer common questions.
Where to get advice
The buttons on this page open Momentum Life's online application, one option among several. 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. Momentum Life's A.M. Best rating is B (Fair), affirmed on 11 February 2026, which Momentum's own table places in its "Vulnerable" range (Momentum Life: Financial strength). Details on the product are on the Momentum Life Funeral Cover page. A licensed adviser can compare options on your own 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.
Adviser's view
Funeral insurance is a small, simple product that does one job: it gives the person you name a lump sum. Its limits are the early-death window and the fact that total premiums can exceed what it pays. The names you see online, such as burial insurance and final expense insurance, are search terms for the same job, and the New Zealand products are sold as funeral insurance or funeral cover.
Talk to a licensed adviser about funeral cover · free, no obligation.
Cite this page QuoteHub NZ (2026). What Is Funeral Insurance? NZ Cover Explained. www.quotehub.co.nz/funeral-insurance/what-is-funeral-insurance-nz. Updated 2026-10-20.
References
- Momentum Life: Funeral Insurance Policy Wording (PDF, issue date 17 August 2023)
- Momentum Life: Quick Life Insurance Policy Wording (PDF, November 2025)
- Momentum Life: Financial strength
- NZ Seniors: Funeral insurance
- OneChoice: Funeral insurance
- AA Life: Funeral cover
- Chubb: Funeral cover
- Greenwich Life: The Funeral Plan
- FDANZ: 2026 New Zealand Funeral Industry Trends Report (PDF)
- Work and Income: Funeral Grant
Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Guides.