Date posted: 02/04/2024 5 min read

Busting myths around life insurance

In the age of fake news, we all know it pays to check the facts. So, what do you really know about life insurance? Brought to you by Pinnacle Life

Myth 1: Life insurance is expensive

Jane Barron, marketing and digital manager at Pinnacle Life, says that life insurance can cost as little as NZ$15.60 a month – that’s about NZ$3.60 a week, so less than the price of a cup of coffee.

The real question is: can you afford not to have life insurance? According to Canstar, the average mortgage in New Zealand is NZ$369,435. That’s a lot of financial pressure if a family loses a breadwinner.

“Having that cover can be a huge help for your loved ones if you die or are diagnosed with a terminal illness,” she says. “It can take care of the mortgage, school fees and funeral costs at a time when they need support the most.”

Myth 2: Insurance companies don’t pay out

Life insurance is a contract between you and the insurer. As long as you fulfil your end of the deal by answering the application questions honestly and making sure you understand any exclusions or waiting periods, the insurer will honour their end.

In fact, over the last three years insurers have paid over NZ$1 billion in life insurance claims each year.

“Pinnacle Life has paid 96% of all claims received as of 31 October 2023,” says Barron.

In addition, most companies will allow you early access to your life insurance funds if you are diagnosed with a terminal illness (and have less than six-to-12 months to live).

Myth 3: Only the main income earner needs cover

Life Insurance isn’t just about your main source of income. For example, who manages the household, cares for elderly family members or gets the kids to school?

You need to think carefully about what life would be like if the worst were to happen and consider your insurance needs accordingly.

At the same time, not everyone needs life insurance. If you’re an empty nester with the house paid off, or you are a single professional with no dependents and no debt, life insurance may be unnecessary, or you may not need as much cover as you once did.

Your needs change according to your life stage and events such as buying a house, getting married, having a child, getting divorced, changing jobs and more.

“If you have life cover, review it once a year to check it’s still right for you,” says Barron. “And, if there’s a significant change in your life, consider how that affects your need for life insurance.”

Myth 4: Health or age disqualifies me from getting cover

You don’t know unless you apply: different companies may have different rules.

What’s important is to disclose any health conditions and explain how you are managing them, so the insurer can factor this into the underwriting process. As medicine has advanced, conditions such as high cholesterol and others no longer automatically disqualify you from getting life cover.

“Only around 7% of our policies pay more to cover health conditions,” says Barron. “We’ll only ask you to get medical tests if we need more information; most people get covered straight away.”

Myth 5: You have to talk to an adviser to get cover

While an adviser can certainly talk you through the different elements of your life cover or help you complete an application, many insurers have comprehensive information online, and some even allow you to apply online for life insurance.

For instance, you can get cover from Pinnacle Life without talking to anyone, if you don’t want to.

“Our underwriting process is all online and if you need help working out how much you need we have a special digital tool that can help with that, too,” says Barron.

Get a quote

Pinnacle Life is a CA ANZ Member Benefits partner, which means CAs qualify for an exclusive discount. Visit or call 0800 22 22 23 to get a quote.