Common Life Insurance Mistakes New Zealanders Make (And How to Avoid Them)
Most people don’t plan to make mistakes with life insurance.
In fact, most of the issues we see start with good intentions and busy lives. Life moves quickly, priorities change, and important decisions are often pushed down the list.
We hear this sentence all the time:
“I’ve been meaning to look into life insurance for a while.”
And usually, by the time that conversation happens, life has already become more complicated than expected.
Mistake #1: Waiting Until Life Feels “Settled”
Many people tell themselves they’ll organise life insurance after:
- Buying a house
- Getting married
- Having children
- Earning more money
The problem is that life rarely reaches a point where everything feels settled.
Responsibilities increase, time disappears, and suddenly years have passed. Ironically, life insurance is usually easier and cheaper to arrange earlier, not later.
Waiting often means higher costs, more exclusions, or fewer options.
Mistake #2: Thinking “Nothing Is Likely to Happen”
This mindset is completely human.
Most people considering life insurance are healthy, active, and working. They don’t expect anything to go wrong — and that’s normal.
But life insurance isn’t about predicting the likelihood of something happening. It’s about understanding the impact if it did.
If someone relies on your income, even temporarily, the consequences can be significant.
Mistake #3: Relying Only on Insurance Through Work
Work-provided life insurance can be helpful, but it often comes with limitations that aren’t obvious at first.
Employer cover is usually:
- Limited in amount
- Not tailored to your personal situation
- Lost when you change jobs
Many people only discover these gaps when they change roles or face redundancy — often at the worst possible time.
Mistake #4: Choosing a Policy Based on Price Alone
It’s natural to focus on cost.
But choosing life insurance based purely on the cheapest premium can be risky.
Policies differ in:
- Definitions
- Conditions
- How and when claims are paid
A policy that looks affordable but doesn’t perform when needed offers false comfort.
Understanding what you’re paying for matters far more than saving a small amount each month.
Mistake #5: Setting Up Cover and Never Reviewing It
Life insurance isn’t a “set and forget” decision.
Over time, your life changes:
- Income grows
- Debts reduce or increase
- Family circumstances evolve
A policy that suited you five or ten years ago may no longer reflect your reality today.
Regular reviews ensure your cover stays relevant — without unnecessary over-insurance.
Mistake #6: Avoiding the Conversation Altogether
Some people avoid life insurance because it feels uncomfortable.
Talking about illness or death isn’t easy, and it’s often postponed because it feels emotionally heavy.
But avoiding the conversation doesn’t reduce the risk. It simply delays preparation.
Most people who eventually put cover in place say the same thing:
“I wish I’d done this sooner.”
A Final Thought
Most life insurance mistakes aren’t dramatic or reckless.
They’re quiet decisions made with incomplete information.
The good news is that once you understand these common mistakes, they’re usually easy to avoid — and even easier to fix with the right guidance.
At Axis Finance, we believe good financial advice should replace uncertainty with clarity, so people can make confident decisions about protecting their future.
Disclaimer: This information is general in nature and does not take into account your personal financial situation, needs, or objectives. Personalised advice should be sought before making any financial decisions.
