How much life insurance do I need in NZ?

The honest answer: enough to discharge your debts and replace your income through your family's dependent years. The right number for you depends on your specific debts, income, and dependents — not a national average. This page walks through the methodology; plug your own numbers in.

The four-component method

Most NZ advisers size life cover as the sum of four components:

1. Mortgage discharge. Your outstanding mortgage balance — what's left to pay if you died today. The number is on your latest mortgage statement.
2. Income replacement. Net household income × years of dependency. A common rule of thumb is 10-15 years for households with school-age kids. Adjust upward if your kids are very young; downward if your surviving partner has strong independent earning capacity.
3. Outstanding personal debt. Credit cards, personal loans, BNPL. Student loans are wiped on death in NZ but still useful to know.
4. Funeral + transition costs. Your family needs cash immediately — before any life payout lands. A buffer for funeral plus a few months of basic living expenses is sensible.

What to NOT count

• Existing life cover. If you already have group cover via employer or KiwiSaver-attached policy, that figure comes off the top.
• Spousal income. If your partner earns enough independently to cover living costs, you can size cover smaller.
• Substantial assets. Investment accounts, KiwiSaver balance, second property — these soften the household's reliance on life cover.

Worksheet — plug your own numbers

We don't publish worked examples with specific figures — every household's numbers are different and stale ranges mislead. Use a spreadsheet or our calculator:

• Mortgage outstanding
• Other debts (credit cards, BNPL, personal loans)
• Annual net household income × years of dependency
• Funeral + transition buffer
• Less existing cover
• = Sum-insured target

How premium scales with sum-insured

Higher sum-insured = higher premium, but not always linearly — many NZ insurers band-price in tiers, and the premium-per-thousand-of-cover often decreases as sum-insured grows. Always quote at multiple sum-insured levels to see the actual shape.

Stepped vs level — the bigger lever

Choice of premium structure has more impact on lifetime cost than minor sum-insured differences. Stepped is cheaper at signup but compounds; level is flatter. See our topic comparison for verbatim wording across NZ insurers.

Where to go from here

• Find-my-policy widget — pick scenarios that match your household, get policy ranking on clause fit
• Topic comparisons — verbatim wording across all NZ life insurers per topic
• Provider directory — for direct quotes from each NZ life insurer
• NZ life insurance advisers are FAP-licensed; most charge no upfront fee (commission-funded)