Budgeting
Planning & budgeting
Saving & investing
KiwiSaver
Tackling debt
Protecting wealth
Retirement
Home buying
Life events
Setting goals
Money tracking
Plan your spending with a budget
Getting advice
Studying
Get better with money
What pūtea beliefs do you have?
How to save your money
How to start investing
Find a financial adviser to help you invest
Your investment profile
Compound interest
Net worth
Types of investments
Term deposits
Bonds
Investment funds
Shares
Property investment
How KiwiSaver works and why it's worth joining
How to pick the right KiwiSaver fund
Make the most of KiwiSaver and grow your balance
How KiwiSaver can help you get into your first home
Applying for a KiwiSaver hardship withdrawal
How to use buy now pay later
What you really need to know before you use credit
How to get out of debt quickly
Credit reports
Know your rights
Pros and cons of debt consolidation
Credit cards
Car loans
Personal loans
Hire purchase
Student loans
Getting a fine
What happens if I start to struggle with moni?
How to protect yourself from fraud and being scammed
About insurance
Insurance types
Insuring ourselves
Wills
Enduring powers of attorney
Family trusts
Insuring our homes
Losing a partner
Redundancy
Serious diagnosis
How to cope with the aftermath of fraud
Separation
About NZ Super
This year's NZ Super rates
When you’re thinking of living in a retirement village
How to plan, save and invest for retirement
Manage your money in retirement
Find housing options in retirement
Planning & budgeting
Saving & investing
KiwiSaver
Tackling debt
How to use buy now pay later
What you really need to know before you use credit
How to get out of debt quickly
Credit reports
Know your rights
Pros and cons of debt consolidation
Credit cards
Car loans
Personal loans
Hire purchase
Student loans
Getting a fine
What happens if I start to struggle with moni?
View all
Protecting wealth
Retirement
Home buying
Resources
Videos
Podcasts
Just wondering
Help with the cost of living
In need of financial help
Booklets
Glossary
Blogs
View all
Reading time: 3 minutes
There are types of insurance available which can ease financial difficulties should the unthinkable happen.
When we’re fit and healthy, it’s hard to imagine life changing. But what would happen if we couldn’t earn an income because we fell ill or became disabled? How would our family manage financially if we died?
If there are people who depend on you financially, you need insurance to protect them.
If you die, your partner and children can be left in financial difficulty when your income is no longer coming in, even just to pay for funeral expenses. Insurance can help by allowing your family to pay off the mortgage and cover extra costs like childcare.
You also need to think about protecting your ability to earn income – whether or not you have dependants.
It can be very difficult to pay living costs and other bills if you have to give up work through illness. ACC only covers loss of income from an accident.
There are also policies called trauma (also known as critical illness), disability (or total permanent disablement insurance) and income protection insurances that pay out for a serious illness or disability.
Trauma and disability policies typically pay a lump sum of money if you’re diagnosed with one of the illnesses or injuries listed on the policy such as cancer, kidney failure, heart disease or paralysis. Income protection insurance pays a percentage of your income if you need to claim.
It’s often cheaper to buy these different types of insurance cover bundled together.
Some insurance companies offer life insurance with trauma or income protection added on. Others have separate policies, but give discounts if you take more than one.
Find out more about these types of insurances at life-info.org.nz.
The most common type of life insurance is 'term life’, which provides cover for a period of time such as 25 years or to a specific age, such as 70 or 80.
Many life insurance policies will pay out some or the entire sum insured on the diagnosis of a terminal illness. This gives you money to live on or pay for care if you are incapacitated and can’t work.
Some older life insurance policies had a savings component attached to them that were paid out at a certain date. These may not have been the most cost-effective way to save, and today it's regarded as simpler to keep life insurance and savings separate.
Life insurance and other related insurances can be difficult to understand, and no one wants to pay for something they won’t end up using!
An insurance broker or financial adviser can explain the options for cover and premiums and make recommendations. They can also look at your financial commitments and family situation and suggest how much insurance cover you need to buy.
It helps to choose a broker or adviser who is independent and not simply selling policies from one insurance company. Besides checking their qualifications, ask how the adviser is being paid for their service and to disclose any commissions being paid.
Guide
Since a home will probably be the biggest asset we own, we’ll need to protect it in case something unexpected happens. With…
Guide
An enduring power of attorney (EPA) is a legal document giving someone the power to act for us. There are…
Guide
Life is full of risks of things that could happen. . . The house burning down, the car being stolen, illness…
Guide
When a relationship ends – especially later in life – it can entirely upend your money life. Separating couples often…
Guide
It can happen to anyone
Falling victim to a scam is far more common than we might think. Scammers and frausters…
Guide
The idea with a family trust is to protect the ownership of our assets. Here’s how trusts work: we transfer the…
Guide
The uncertainty that comes with losing a job or redundancy is a challenge, but leaving one role always opens up…
Guide
When it comes to fraud and scams, knowledge is power. Become a real-life superhero by arming yourself with the information…
Guide
Sorting out your will brings you and your people peace of mind. Should you ever need to exit this world…
Guide
Being diagnosed with a serious or terminal illness can be overwhelming. Those niggly, everyday practical things can suddenly feel huge.…
Don’t know where to start? Our 6 steps will help you to take control of your money.
Head to the 6 stepsUse verification code from your authenticator app. How to use authenticator apps.
Code is invalid. Please try again
Don't have an account? Sign up
Or log in with our social media platforms
A Sorted account gives you a personal dashboard where you can save your tools, track your progress and you'll also receive helpful money tips and guidance straight to your inbox.
Or sign up with our social media platforms