The average New Zealand life insurance cover now costs $827.50 a year, and rose by more than 2.7%
Source: Financial Services Council
The FSC published $3.31 billion of annual premium across 4 million covers, and premium growth of 2.7% alongside falling cover numbers. Divide one by the other and the per-policy increase is arithmetically larger than the headline.
By Henry Smith · Premiums · 2026-06-08
The average New Zealand life insurance cover now carries $827.50 of annual premium, and the increase per cover over the past year is arithmetically more than the 2.7% headline. Both numbers come straight out of the Financial Services Council's own release. Neither is in it.
What the FSC published
The Financial Services Council published industry statistics to 31 March 2026 on 8 June 2026, under the heading that life insurance cover is softening as premium pressure builds. It reports 4 million life insurance covers in force against a New Zealand population of 5.35 million. Annual life insurance premiums reached $3.31 billion, up 2.7% year on year, "even as cover numbers continued to fall across several key products".
The premium is split across products: $1.64 billion for term and accidental death cover, $672 million for trauma, and $539 million for income protection (FSC, retrieved 20 August 2026).
The FSC is an industry association, not a regulator or a statistics agency. It describes itself as a non-profit member organisation and the voice of the financial services sector in New Zealand, and the members whose data forms these statistics are the insurers being reported on. That does not make the figures wrong. It does mean they are self-reported by the industry about itself, and the framing around them is written by a body whose job is to advocate for that industry.
The number the release does not contain
Divide $3.31 billion by 4 million covers. The average annual premium per cover in force is $827.50, or $68.96 a month.
That is our calculation, and it is a simple one. The FSC published both inputs and did not perform the division. As far as we can find, no one else has either.
Two things about that figure. It is an average across every product, so it mixes a $30 a month term life policy with a $250 a month income protection policy, and it is an average across covers rather than people. It is also the only per-policy figure available for the New Zealand market that traces to a whole-of-industry data set rather than a quote engine, which is what makes it worth stating despite the mixing.
Why the per-cover increase has to be more than 2.7%
Here is the part that follows logically and that the FSC's own release draws no conclusion from.
Total premium rose 2.7%. Cover numbers fell. Premium per cover is total premium divided by cover count. If the numerator rises and the denominator falls, the quotient must rise by more than the numerator did. The per-cover increase cannot be 2.7%. It is strictly greater, and the size of the gap depends entirely on how far covers fell.
The FSC does not publish the change in cover count. So the exact figure cannot be pinned down, but the shape of it can. If covers fell by x, the per-cover premium rose by 1.027 divided by (1 minus x), less one.
| If cover numbers fell by | Then premium per cover rose by |
|---|---|
| 0% (flat) | 2.7% |
| 0.5% | 3.2% |
| 1% | 3.7% |
| 2% | 4.8% |
| 3% | 5.9% |
| 5% | 8.1% |
Our calculation from the FSC's published 2.7% premium growth. The left column is a range of scenarios, not FSC data.
The FSC's own words are "continued to fall across several key products", which rules out the first row. Everything below it is live. A 2% fall in covers, which would be unremarkable in a year of cost-of-living pressure, puts the increase experienced by an average policyholder at nearly double the headline number the industry reported.
This matters because 2.7% is the figure that gets quoted, and 2.7% reads as roughly in line with inflation. The number a person actually experiences on their renewal notice is the per-cover one.
What the product split shows
The three products the FSC itemises add to $2.851 billion of the $3.31 billion total. That leaves $459 million, or 13.9% of all New Zealand life premium, in products the release does not name.
| Product | Annual premium | Share of total |
|---|---|---|
| Term and accidental death | $1.64b | 49.5% |
| Trauma | $672m | 20.3% |
| Income protection | $539m | 16.3% |
| Not itemised in the release | $459m | 13.9% |
| Total | $3.31b | 100% |
Premium figures from the FSC, retrieved 20 August 2026. Shares and the unitemised residual are our calculation.
Income protection is the smallest of the three named products at 16.3% of premium, which is worth holding next to what it is competing with. ACC paid $2,855 million of weekly compensation in the year to 30 June 2025 (ACC, Annual Report 2025, retrieved 20 August 2026). New Zealand's entire private income protection premium base is under a fifth of what the state scheme pays out in income replacement, which is the clearest single statement of how much of this country's income risk sits with ACC rather than with insurers.
Do not read 4 million covers as a coverage rate
The 4 million covers against 5.35 million people comparison invites an obvious misreading, that roughly three quarters of New Zealanders hold life insurance. It does not mean that, and the FSC does not claim it does.
Covers are policies, not people. Someone with term life, trauma and income protection is three covers. If the average insured adult holds two covers, 4 million covers is about 2 million people, or under 40% of the population. If they hold three, it is closer to 1.3 million people. The FSC does not publish the covers-per-person ratio, so the true coverage rate is unknown from this release and could plausibly sit anywhere between a quarter and a half of the adult population.
What this means for your policy
If your renewal came in above 2.7% this year, that is the market, not a personal repricing. The industry average per cover moved by more than the headline.
Two separate things drive your number and it is worth knowing which is which. Age-related stepped rate increases apply to you individually and get steeper every year, particularly past 50. Portfolio repricing applies to everyone on your product and is the insurer resetting rates across the book. Our guides to average life insurance premiums in New Zealand and what drives life insurance premiums cover how to tell them apart on a renewal notice.
The honest limits
The $827.50 depends on "4 million covers" being an actual figure rather than a rounded one. The FSC states it as "4m", which could represent anything from 3.95 to 4.05 million. At the extremes the average premium per cover ranges from $817 to $838. We have used the stated figure and we are noting the rounding rather than implying a precision the source does not support.
The bigger gap is that the FSC did not publish the cover-count change, so the per-cover increase cannot be given as a single number. Our table is a sensitivity analysis, not a measurement. If the FSC publishes the cover count change, this can be resolved to a single figure in one line of arithmetic, and we would update this page.
We read the FSC's blog post. We did not obtain the underlying "Spotlight on Life Insurance" data set it draws from, so every figure attributed to the FSC here is as summarised on that page. The ACC comparison spans different periods, ACC's year ends 30 June 2025 and the FSC's ends 31 March 2026, and premium in is not the same kind of number as claims paid out. It is a scale comparison, not a ratio with meaning beyond that.
Sources
- Life insurance cover softens as premium pressure builds, Financial Services Council, 8 June 2026
- ACC Annual Report 2025 (PDF)
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Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Referral.