How Much Life Insurance Cover Do You Actually Need in New Zealand?
One of the most common questions people ask isn't "whether they need life insurance - it's this:
much cover is actually enough?
And it's a fair question.
Too little feels risky.
Too much feels unnecessary.
And guessing usually leads to the wrong outcome.
Why There’s No One-Size-Fits-All Answer
Life insurance isn't about picking a random number.
It's about answering a simple but uncomfortable question:
If I wasn't here tomorrow, what financial problems would the people I care about be left with?
For some families, that answer is small.
For others, it's significant.
The Key Things to Think About
When working out how much cover makes sense, most New Zealanders should consider:
- Mortgage or rent commitments
- Other debts (personal loans, credit cards)
- Ongoing living expenses
- Children"s costs (now or in the future)
- How long income support would be needed
Life insurance is usually designed to buy time - not fund a lifetime.
A Common Mistake: Choosing a “Nice Round Number”
We often see people choose cover amounts like:
- $200,000
- $300,000
- $500,000
Not because it"s right - but because it "sounds right.
Without context, these numbers don"t mean much. Good cover is intentional, not random.
What Happens When Cover Is Too Low
Underinsuring is one of the most common issues we see.
It can mean:
- Mortgages still need to be serviced
- A partner must return to work earlier than planned
- Financial stress replaces emotional space
Life insurance works best when it removes pressure - not just partially reduces it.
A Practical Way to Think About It
Rather than asking "How much can I afford?", a better question is:
"What problem am I trying to solve?"
Once that"s clear, the numbers usually make more sense.
Final Thought
Life insurance isn't about predicting the future.
It's about being realistic about today - and protecting the people who matter most.
Disclaimer: This information is general in nature and does not take into account your personal financial situation, needs, or objectives.
