Life insurance over 60 in New Zealand: what changes with age

Can you get life insurance over 60 in New Zealand?

Usually, yes. Insurers set a maximum age for new applications and an age at which cover ends, and those ages differ between insurers and products, so the policy document is the place to find them. What changes most after 60 is price, and how much the health questions decide.

Life cover is priced on the chance of a claim, and that chance rises with age. So the same sum insured costs more at 62 than it did at 42, and on stepped premiums it goes on rising every year. None of that makes cover impossible. It makes the size of the sum insured, and how long you expect to hold it, the questions that matter.

What changes when you apply for cover later in life?

Four things: the premium is higher and on stepped cover rises each year; some products stop accepting new applications past a stated age; cover often ends at a stated age; and the health questions carry more weight, so exclusions or loadings are more likely. Each of these is set by the policy, not by law.

• Price. Stepped premiums are recalculated each year as you age. Level premiums start higher and are held for a set period. Later in life the gap between the two narrows in some years and widens in others, which is why the choice depends on how long you hold the cover.
• Entry age. Each insurer and product sets the oldest age at which it will accept a new application. A product you could have bought at 55 may not be open to you at 70.
• Expiry age. Many policies end at a stated age, or convert to something else. Read when your cover stops, not just when it starts.
• Underwriting. A health history that was blank at 40 is rarely blank at 65. Insurers can accept as normal, add an exclusion for a condition, load the premium, or decline.

Do you still need life cover once the mortgage is gone?

That depends on what would happen to your household if you died, and it is a personal question. For many people the large reasons for life cover, a mortgage and children who rely on their income, have passed by their sixties. For others a partner still relies on their income, or debts remain.

The rule of thumb on this site works just as well at 65 as at 35: add what would need to be paid, subtract what you already have. If the result is small, the cover you need may be small too, or none. If a partner depends on your pension or income, or a business loan is guaranteed against the house, it may not be. The calculator shows the working either way.

Common reasons people in their sixties and seventies still hold life cover: a partner who would struggle on one income, a remaining loan, a business, a wish to leave a sum to family, and the cost of a funeral. That last one is often met more cheaply in other ways, which our funeral insurance guide sets out.

Should you keep an old policy you already have?

Think hard before cancelling one. A policy taken out years ago was underwritten on the health you had then, which cannot be recreated, and a new policy at your current age will usually cost more for the same cover and may carry exclusions the old one does not.

If the premium on an old policy has become hard to afford, there are usually options short of cancelling: reducing the sum insured, removing a benefit you no longer need, or asking whether the premium structure can change. Each insurer handles this differently, and the insurer or your adviser can tell you what your policy allows.

What about cover with no health questions?

Products with few or no health questions are widely advertised to people over 50. They suit some people, especially those whose health would make underwritten cover hard to get. They usually cost more for the amount of cover, often have a waiting period at the start, and the premiums can add up to more than the sum insured if you live a long time. Our funeral insurance guide covers what to check.

What should you ask before buying cover after 60?

1. At what age does this cover end, and what happens then?
2. Is the premium stepped or level, and what does it look like in five and ten years?
3. Is there a waiting period, and does it apply to illness, accident or both?
4. What health questions were asked, and is everything I disclosed accurate?
5. Does this replace or duplicate cover I already have?