Understanding the key differences between term and whole life insurance to make the best choice for your family in New Zealand
Compare Both Types - Get Quotes| Feature | Term Life Insurance | Whole Life Insurance |
|---|---|---|
| Coverage Duration | Temporary (10-30 years) | Permanent (Lifetime) |
| Initial Premiums | Much Lower | Much Higher |
| Cash Value | None | Yes |
| Premium Changes | Can increase over time | Fixed for life |
| Best For | Most families with temporary needs | Estate planning & wealthy individuals |
| Complexity | Simple | Complex |
Affordable protection for most New Zealand families
Male: $40-70/month | Female: $35-60/month
Male: $70-120/month | Female: $55-95/month
Male: $150-250/month | Female: $110-180/month
*Rates for non-smokers in good health
Permanent protection with investment component
Male: $400-600/month | Female: $350-500/month
Male: $600-900/month | Female: $500-750/month
Note: Whole life premiums are typically 5-15 times higher than term life for the same coverage amount.
If you're struggling to afford adequate coverage, term life is almost always the better choice. You can always convert to permanent insurance later.
If your need for insurance will decrease over time (mortgage paid off, kids independent), term life is more appropriate.
If you're disciplined about investing and have access to better investment options (like growth funds), term life + separate investing often yields better returns.
If you have estate tax concerns or want to leave a guaranteed inheritance, whole life insurance can be an effective tool.
For most New Zealand families, term life insurance is the better choice. It provides more coverage for less money, allowing you to invest the difference in higher-return investments like diversified funds or property.
Many term life policies include a conversion option that allows you to convert to permanent insurance without a medical exam, usually within the first 10-20 years of the policy.
If you outlive your term, the policy expires and you receive nothing back. However, if you've invested the premium savings wisely, you may have built substantial wealth over the term period.
The cash value in whole life typically grows at 2-4% annually, which is often lower than what you could achieve with diversified investments in the share market over the long term.
This strategy often works well for disciplined investors. Buy cheaper term insurance and invest the premium difference in growth assets like shares or property for potentially higher returns.
Get personalized quotes for both term and whole life insurance from New Zealand's leading providers
Get Your Free Quotes Now100% free • No obligation • Compare both types