The catches and trade-offs of guaranteed acceptance cover

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.

The main catches of guaranteed acceptance life insurance are an early period in which little or nothing is paid for illness, exclusions that never end, premiums that can add up to more than the benefit, and limits on how much cover you can buy. Momentum's Funeral Insurance pays only for accidental death for its first 24 months. Quick Life excludes pre-existing conditions and suicide for 2 years, and always excludes dangerous jobs and pastimes.

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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.

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.

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.

Guaranteed acceptance means the insurer agrees to cover you without health questions, if you meet its age and residency rules. That is a real benefit: your health is not assessed at application. A catch is a term that narrows what that acceptance buys. This page lists the catches in Momentum's two wordings, one by one, with where each one bites and what to do about it. It is the unflattering half of the picture, set beside a plain statement of who the products suit. Nothing here makes guaranteed acceptance a bad product. The point is that "guaranteed" describes who is accepted, not what is paid. It is general information, not advice.

The catch list

Catch	Where it bites	What to do
Early period, Funeral Insurance	First 24 months: only accidental death (within 90 days of the accident) pays; any other death pays nothing and all premiums are refunded	Do not buy it expecting a payout in the first two years
Early period, Quick Life	First 2 years: pre-existing conditions and suicide excluded; premiums refunded for a pre-existing condition death in the first 24 months with no claim payable	Read the pre-existing definition below
Restarts	Cancelling and rejoining, reinstating after cancellation, or increasing cover (the increase only, unless automatic) restarts the 2 years	Do not cancel and rebuy
Permanent exclusions, Quick Life	Alcohol or drug effects, war, terrorism, criminal activity, listed dangerous jobs or pastimes, and some conditions named in your schedule	Check the schedule and the list below
Premiums rise, Quick Life	Reset yearly for age, gender and smoking status until 75, then fixed	Check you can pay in your 70s
Premiums can change	Both policies: for a change in tax or other law, or claims experience, on 30 days' notice	Budget for a rise
Total cost against benefit	Premiums over many years can exceed the benefit	Run the numbers, example below
Benefit size	Funeral $3,000 to $30,000; Quick Life $50,000 to $300,000	Compare with the actual need
Card fee and lapses	Funeral Insurance card payments carry a processing fee; on both policies, premiums unpaid over a month can lead to cancellation	Use direct debit if you can
Rating	A.M. Best B (Fair)	Read the section below

Sources: Funeral Insurance wording (17 August 2023) and Quick Life wording (November 2025), retrieved 17 October 2026.

The 2-year pre-existing rule is wider than people expect

In the Quick Life wording a pre-existing condition is any illness, condition or symptoms you had during the 2 years before the policy started. That includes anything you had treatment or advice for, symptoms you noticed even if undiagnosed, and things you would reasonably have been aware of. It also includes some health markers by name: very high blood pressure, cholesterol over 7.0, a BMI over 40, and complications related to diabetes. Because there are no health questions, the check happens at claim time. After 2 years pre-existing conditions are covered "except some specific conditions" that can be permanently excluded, listed in your policy; the general wording does not say which. See the two-year exclusion.

Exclusions that never end

Quick Life will not pay at any time for death or terminal illness caused by the effects of alcohol or drugs (unless a prescribed drug was taken exactly as directed by a registered New Zealand doctor), war, terrorism, criminal activity, or a dangerous job or risky pastime as defined in the policy. The list includes handling explosives or weapons, working 40 metres underwater, driving or riding faster than 130km/h outside commercial flights, professional sport and active armed-forces duty. Momentum does not ask your job or pastimes when you apply, so the issue arises at claim time. Momentum's Quick Life web page does not repeat this clause, so read the wording (Momentum).

Can premiums add up to more than the benefit?

Yes, and both wordings say so. The Funeral Insurance wording says total premiums could exceed the benefit and the benefit may not cover the cost of a funeral. Quick Life says total premiums might be more than the benefit paid out. Funeral Insurance premiums are level until the 89th birthday and then stop; Quick Life premiums rise each year until 75 and are then fixed.

A worked example, with round numbers that are not a Momentum price. Suppose someone starts a $10,000 funeral policy at 70 and pays $720 a year for it. It runs to the 89th birthday, which is 19 years: $720 × 19 = $13,680. That is more than the $10,000 benefit, and the total paid passes the benefit after about 14 years. If they die in year 3, the first 24 months have passed, and the benefit is paid. If they die in year 1 of illness, no benefit is paid and the premiums are refunded. Try your own numbers in the funeral insurance break-even calculator.

IFSO published a case of a 2010 policy of $20,000 with premiums to age 90 and no warning they could exceed the sum; the insurer refunded all premiums, and IFSO noted it "is not a savings product" (IFSO). The benefit may also fall short of the funeral: the Funeral Directors Association's 2026 report puts a full funeral for 50 guests at $11,700 for a cremation and $14,300 for a burial (FDANZ).

How price compares

QuoteHub's panel of six insurers includes Momentum, which priced only Quick Life at $250,000. As at 8 September 2026, stepped, non-smoker, class 1 and standard rates, indicative monthly costs from insurers' published rate cards ran from $25 to $70 for a man aged 40 and $20 to $60 for a woman, and from $170 to $325 and $130 to $250 at 60. That panel mixes a product with no health questions and policies with them. A healthy person accepted on standard terms can usually get more cover for less through a licensed adviser. Your own premium depends on underwriting. See the premium ranges and method.

What Momentum's rating means

Momentum Life Limited has an A.M. Best Financial Strength Rating of B (Fair), affirmed on 11 February 2026. A.M. Best's scale calls Fair "a fair ability to meet their ongoing insurance obligations", with strength "vulnerable to adverse changes in underwriting and economic conditions", and Momentum's own table puts B in a "Vulnerable" range (A.M. Best, Momentum). Momentum reports a solvency ratio of 107% at 30 June 2026, with a margin of about $0.6 million. A rating is not a recommendation and does not say how claims are handled. It is one fact to weigh, not a reason on its own to avoid or choose a policy. Policies bought before 14 March 2018 are insured by Fidelity Life, not Momentum.

Who it suits, and who it does not

It suits someone who would be declined or heavily loaded elsewhere, or who wants cover in place without questions and accepts the early period. It suits a funeral buyer aged 40 to 75 who has weighed the alternatives, including saving. It is a weaker fit for a healthy person, for anyone needing more than $300,000, or for anyone expecting to claim in the next two years. Over 75, neither product accepts new applicants. When cover with health questions is available, price it first: guaranteed acceptance versus full medical underwriting.

Where to get advice

The buttons on this page lead to Momentum's online quote. 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). Plan pages: Quick Life and Funeral Insurance. Start with what guaranteed acceptance is or the hub.