Life insurance beneficiary vs will in New Zealand: who gets the payout

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.

In New Zealand a life insurance payout goes where the policy says, not where your will says. The insurer pays the policy owner or, if the insurer's terms allow one, a beneficiary nominated on the policy. Only money that is payable to the estate is distributed under your will or, with no will, under the intestacy rules in the Administration Act 1969.

Get a quote and apply online today

See your price in about a minute, then apply online with Momentum Life. Guaranteed acceptance, no health questions, no medical exams.

Life cover See your price Ages 18–65 · $50k–$300k Funeral cover See your price Ages 40–75 · $3k–$30k

Want more than $300k or have questions? Talk to an adviser

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.

A nominated beneficiary is a person named on the policy to receive the benefit when the person insured dies. A will is a separate document that deals with your estate, which is what is left once ownership and nominations have done their work. Community Law explains that life insurance proceeds are estate property only if they are payable to the estate, and that who is paid depends on the policy's ownership and the insurer's terms (Community Law Manual, chapter 16). New Zealand has no general law that lets an adult nominate a life insurance beneficiary: the Life Insurance Act 1908 provisions that protected a spouse and children (sections 65 and 66) were repealed on 1 April 1986 (Life Insurance Act 1908). So the rules you rely on are your policy wording and the owner's choices on the schedule.

Owner, insured, beneficiary, executor: four different roles

Most confusion comes from treating these as one person. The policy schedule names them.

Role	What it means	Why it matters at a death
Life insured	The person whose death triggers the benefit	The claim is for their death
Policy owner	Controls the policy; usually the person insured, but not always	Can nominate or change a beneficiary and is paid if there is none
Nominated beneficiary	A person the owner has named to receive the benefit	Paid in preference to the estate, if the insurer's terms allow nominations
Executor	The person who deals with the estate under the will	Claims only if the money is payable to the estate

Who owns the policy is the first question. If someone else owns the policy on your life, such as a business partner, a bank or a family member, the payout goes to that owner whatever your will says. The life insured does not have to be the owner. Under Momentum's Quick Life wording, owners other than the insured can be the insured's "immediate family, limited to parents or siblings", with the insured's consent, and a trust is not listed, so we do not say a trust can own Quick Life.

Does a nominated beneficiary override a will?

Where the insurer's terms let the owner name a beneficiary and one is validly named, the benefit is paid to that person and is not payable to the estate, so the will does not govern it. That is the direct answer to "beneficiary vs will". The sequence Fidelity Life publishes in its claims guide shows the order of priority (Fidelity Life: claims guide, retrieved 20 October 2026):

Who owns the policy	Beneficiary named?	Will?	Who can claim
Someone other than the deceased	Not relevant	Not relevant	The policy owner
The deceased, with an additional owner	Not relevant	Not relevant	The additional owner or owners
The deceased	Yes	Not relevant	The named beneficiary or beneficiaries
The deceased	No	Yes	The executor or executors of the will
The deceased	No	No	The next of kin

That table is one insurer's rule. Insurers differ, so read your own wording. The Momentum Life wordings are specific, and they differ between the two products.

What Momentum Life's two products say

Momentum Life Limited issues Funeral Insurance and Quick Life. In both, the owner can name a beneficiary, and in both the wording sends the money to the estate only if no one else can be paid.

Funeral Insurance. Benefits are paid to the policy owner, or on the owner's death to the nominated beneficiaries. If none is nominated, the payment goes to the policy owner or to the executor of the owner's estate. If a beneficiary dies before the owner, their nomination ends and their share is divided among the remaining beneficiaries unless the owner updates it. The 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. Payment is usually within 24 to 48 hours of approval (Momentum Life: Funeral Insurance Policy Wording, 17 August 2023).
Quick Life. The benefit is paid to the nominated beneficiary if one is listed. If none is listed, or they have also died, it goes to the policy owner or their estate. Only the policy owner can nominate or change a beneficiary, using a change of beneficiary form. If the owner dies, ownership of the policy passes first to a surviving joint owner, then to the beneficiary, then to the owner's estate. Payment is usually made within 48 hours of approval (Momentum Life: Quick Life Insurance Policy Wording, November 2025).

Momentum's own FAQ gives the same order for payouts: policy owner, then nominated beneficiary, then executor (Momentum Life: FAQs).

Two limits apply to both. Funeral Insurance accepts New Zealanders aged 40 to 75 with no health questions, but in the first 24 months it pays only for accidental death; any other death pays no benefit and the premiums are refunded. Quick Life accepts ages 18 to 65 with no health questions, but for the first 2 years it excludes pre-existing conditions and suicide. A beneficiary named on either policy receives only what the policy pays. Momentum's A.M. Best financial strength rating is B (Fair); see Momentum's financial strength page.

What happens if no beneficiary is named?

If you own the policy on your own life and no one else is named, the benefit is payable to your estate. Then the will decides, or the intestacy rules if there is no will. See dying without a will in NZ for those rules: for example, where there is a partner and children, section 77 of the Administration Act gives the partner the chattels and the first $155,000 plus interest, then one third of the rest, with two thirds held for the children.

The insurer will usually want proof the person claiming has authority. That means a grant of probate or letters of administration, which are High Court orders (Ministry of Justice: probate). The grant fee is $275 as at 20 October 2026 and a lawyer's fee is extra. The Ministry's guide gives a typical 15 working days if nothing more is needed, and govt.nz says it usually takes 6 to 8 weeks (govt.nz: wills, probate and estates). See probate in New Zealand.

Does a small payout need probate?

Not always. Under section 65(5) of the Administration Act 1969, where a sum has become payable to the administrator of the estate under a life policy and does not exceed the prescribed amount, the insurer may pay it without a grant to the people listed in section 65(2)(a) to (e). They include the partner, children, those entitled under the will or intestacy and a carer of minor children, and each must apply or consent. That amount is $40,000 from 24 September 2025 (Administration Act 1969, s 65; Public Trust). Three cautions. The old $15,000 figure that many sites still quote now applies only to government and local authority stock and company shares. The insurer chooses whether to pay without a grant; it does not have to. And the limit applies to each payer, not to the whole estate, a point Community Law makes (Community Law: small estates).

Can you name a child as beneficiary?

Momentum's two wordings say nothing about beneficiaries under 18, and we found no published New Zealand rule we can quote on how an insurer pays a child. Do not assume it is simple. Ask the insurer in writing before you name a child, and ask a lawyer how money for a child can be held. A will can create a testamentary trust to hold estate money for young beneficiaries (Wills Act 2007, s 8(4)); see testamentary trusts in NZ. That works for money that reaches the estate. It does not hold a payout that is paid to a named beneficiary outside it. For a small sum payable to the estate, section 65(5) allows an insurer to pay a carer of minor children who applies or agrees, but that is the insurer's choice and does not apply to a benefit paid to a named beneficiary.

What if the beneficiary dies first?

Check the wording. Under Momentum Funeral Insurance the nomination ends and the share passes to any remaining beneficiaries, unless the owner has updated it. Under Quick Life, if the beneficiary has also died the benefit goes to the owner or their estate. Whatever the wording, a nomination should be reviewed after any death, birth, separation or marriage. Marriage or a civil union also revokes an earlier will unless it was made in contemplation of the marriage (Wills Act 2007, s 18), which matters when the estate is the beneficiary.

How other insurers handle it

Wordings differ enough that a general answer is unsafe. Each document below was re-read on 20 October 2026:

Insurer	What its own document says
Fidelity Life	Publishes the claims table above: owner, then beneficiary, then will, then next of kin
Asteron Life	"Unless you have nominated a beneficiary, a benefit will be payable only to the Policy Owner(s)"; its Nominated Beneficiary Form has space for two individual beneficiaries and for trustees or a charity
nib	You can name a beneficiary if you are both the policy owner and the person insured; the payment goes to your estate if the beneficiary is not alive at the date of payment
Partners Life	Pays the owner "or to any other persons nominated as recipients by you at the time of the claim"; joint owners pass ownership to the survivors
Chubb Life	The Life & Living document we checked describes no nomination process: treat that as not published and ask Chubb

Sources: Fidelity Life claims guide; Asteron Life Nominated Beneficiary Form; nib Life & Living Insurance Cover Wording; Partners Life Protection Plan Policy Document, s 9; Chubb Life policy document.

Other claims that can touch a payout

Relationship property. The Property (Relationships) Act 1976 includes, as relationship property, the share of a life policy's value or proceeds attributable to the relationship, except policies where a third person is beneficially entitled (s 8(1)(g)). Nothing divides automatically, and the court can make orders about policies (s 30). A surviving partner has 6 months from the grant to choose between a division and what the will gives (Property (Relationships) Act 1976). See the Property (Relationships) Act in NZ.
Family Protection Act claims. A spouse, partner, child, stepchild maintained by the person, grandchild or parent can apply to the court within 12 months of the grant if adequate provision was not made (Family Protection Act 1955, ss 3, 4, 9). We found no source on whether a payout made directly to a named beneficiary can be reached by such a claim, so if a will leaves out a family member, ask a lawyer.
KiwiSaver. It does not follow a nomination. On death the provider pays the balance to the estate or under the section 65 route (KiwiSaver Act 2006, Schedule 1, clause 9).
Tax. New Zealand has had no inheritance tax since estate duty ended for deaths from 17 December 1992 (Estate Duty Abolition Act 1993, s 3). IRD says "generally, insurance payouts are excluded income" (IRD). That is general information, not tax advice.

A checklist for your own policy

Use this at the start of each year or after a major life event.

Find the policy schedule. Note the owner, the life insured and any nominated beneficiary.
Check the beneficiary is a person who is alive and the right person now, and that their name is spelt as it appears on their ID.
Check that the owner is who you think. If a parent, sibling, partner or business owns the policy, they are paid, not your estate.
Compare it with your will. If the will says one thing and the schedule another, decide which you mean and change the one that is wrong. Our guide to making a will in NZ covers the will side.
Tell the person. Insurers do not always tell a beneficiary, and they may not know to claim.
If the sum could be large, think about whether a named beneficiary or the estate suits your family, and ask a licensed adviser or lawyer.

Premiums for a funeral policy can add up to more than the benefit, and a funeral benefit may not meet the whole cost of a funeral. Nobody should buy cover only to choose a beneficiary. If cover suits you, the buttons on this page start Momentum's own online quote, with Life Cover first. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a Momentum Life partner and may receive a commission; see how we are paid. For the claims process, see how a life insurance payout works after death and how to claim life insurance in NZ.

Frequently asked questions

Can you have life insurance without a beneficiary?

Yes. If none is named, Momentum's Funeral Insurance pays the policy owner or the executor of the owner's estate, and Quick Life pays the policy owner or their estate. Other insurers follow the order in their own wording.

Does a nominated beneficiary override the will?

Where the insurer's terms allow a nomination and it is valid, the benefit is paid to that person and is not payable to the estate, so the will does not control it. The effect of a nomination comes from the policy, because New Zealand has no general statute that creates it.

Does life insurance go through probate?

Only if the money is payable to the estate and the insurer wants a grant. A payout to a named beneficiary or an additional owner does not depend on the will. For sums under the $40,000 prescribed amount, an insurer may pay without a grant but does not have to.

Who is the owner, and does it matter?

It matters most. The owner can nominate and change a beneficiary and is paid when there is none. In Quick Life only the owner can nominate or change a beneficiary.