Life insurance doesn’t only cover people when they pass away, it can provide critical cover for people diagnosed with a terminal illness. In a lot of these instances, the life insured needs to stop working and has expensive medical bills to cover, yet their day-to-day living costs don’t stop. Having a life insurance policy can be a worthwhile investment to help manage these unexpected circumstances.
If the policyholder is diagnosed with a terminal illness, we will pay you the current Life Cover Amount (ie the sum insured), up to a maximum of $500,000. If this payout doesn’t cover the full amount insured, the rest will be paid out when the policyholder passes away, provided premiums continue to be paid during this time. If we pay the Terminal Illness Benefit equal to the current Life Cover Amount, the Policy will end and no further premiums will be payable.
Our LifeOne® policy wording has further information on this if you would like to learn more about terminal illness cover as well as other features of this policy.
What is life insurance?
Life insurance is a product offered by an insurance provider, which enables you to select a dollar amount you wish to be covered for in the event of your death or diagnosis with a terminal illness - in which case, a lump sum will be paid out in accordance with your wishes.
In exchange for this cover you pay a small regular payment, known as a premium. Premiums can be paid fortnightly, monthly, biannually or yearly, depending on what’s easier for you.
Understanding the ins and outs of life insurance is important for anyone looking to invest in a life insurance policy. We want Kiwi to understand what life insurance is and why it’s important to have life cover. This page will address those questions as well as break down some of the technical life insurance lingo.
Unexpectedly losing a loved one can be a traumatic time for a family.
Emotionally there’s a lot to process; not to mention there’s the funeral to plan and pay for, extended family and friends to contact, immediate family to console. And of course looking forward, there are the finances to consider.
- It’s security that ensures your loved ones don’t get caught short, if you were no longer there to support them.
A life insurance payout can be put towards large costs such as settling a mortgage or supporting your Whanau - ensuring they can maintain their standard of living after you’re gone.
- How would your family manage to continue their day to day lives if you were no longer there to support them?
If your departure would result in your family needing to sell the home or downsize, then life insurance might be a good option for you.
- A life insurance broker or agent will help you determine the type of life insurance that is best suited to your needs.
To get started, you can also use our Chubb Life Insurance Calculator to find out how much cover other people like you get.
How does it work?
End-of-life planning is a conversation topic most of us would prefer to avoid. Even though it can feel uncomfortable, it’s important to have a contingency plan in place, in the event of a tragedy.
Life Insurance can be a worthwhile investment to safeguard the wellbeing of your loved ones in times of hardship. But how does it work exactly?
1. Weigh up your options
If you’re interested in life insurance cover, the first step is to compare life insurance options thoroughly, to find the right insurance provider for you.
From here, you’ll determine the amount of cover you need, the insurer may ask for information on your medical history and your premium will be determined.
2. Pay premiums
Once the policy has been finalised, you’ll pay the agreed premium to your insurer on an ongoing basis.
Your life will be covered from the date your policy states, so you’re usually protected in the case of early claims, ie claiming before you would expect. Paying your premiums at the agreed time is critical to ensure you’re always covered.
3. Adjust your policy
Sometimes, as your circumstances change, you’ll need to revisit your policy.
Perhaps you have a child, or purchase your first home, meaning you’ll need to list new dependents on your policy, or increase/decrease the insured sum. You may also find your premiums increase as you age - this depends on the type of insurance policy you take out, which we will discuss below. It’s a good idea to make sure these changes are also reflected in your will. Read more about writing a will and why it’s imperative to protect your financial legacy.
4. Claim
When the policy holder passes away, or is diagnosed with a terminal illness, the insurer will pay out the agreed lump sum to the estate of the policy owner. To place a claim, you can call our claims team on 0800 244 623.
The cost of a life insurance policy is different for everyone as it’s influenced by your selected cover, personal health history and other policy additions you may opt for.
Before you select your level of cover, ask yourself how much money your family is likely to need if you were no longer there to support them. Establishing this first can prevent you from selecting too much or too little cover.
As cover is so personal, the recommended level of cover will vary between people. Why not see how much cover you’d need with our Life Insurance Calculator.
A premium is calculated using a range of factors that relate to the person’s life expectancy, and therefore their likelihood of claiming in the near future. Life insurance companies usually have a team of actuaries, who are responsible for the measurement and management of this risk and uncertainty.
When you apply for a life insurance policy, you might be asked questions like:
your biological sex
your age
your medical history
your family medical history
whether or not you’re a smoker.
Your answers to these questions will determine the premium you pay for the sum you want to be insured for.
It can be difficult deciding whether or not life insurance is something you need to invest in. As with many things in life, there’s no exact yes or no answer.
Taking out a life insurance policy should be based on your stage in life as opposed to a specific age. If someone close to you, be it a spouse, business partner or child is financially dependent on you, then life insurance could be a worthwhile investment. We also wrote a helpful blog on life insurance when you’re single - have a read.
It’s a good idea to re-evaluate your life insurance needs annually, or if there is a significant change in your life. getting married or divorced, having a baby or buying a home are key life stages that often warrant getting a life insurance policy.
More than just life insurance
The right life insurance can you bring peace of mind from knowing that you've protected what matters most.
Your insurance is underwritten by Chubb Life Insurance New Zealand Limited (Chubb Life). Chubb Life has an A (Excellent) financial strength rating given by A.M. Best Company Inc. A summary of the rating scale is: A++, A+ Superior | A, A- Excellent | B++, B+ Good | B, B- Fair | C++, C+ Marginal | C, C- Weak | D Poor | E Under Regulatory Supervision | F In Liquidation | S Suspended. For the full rating scale and more rating information visit www.ambest.com/ratings/guide.pdf