Life Cover is a simple product. Its purpose is to pay out when you die.
That means, if you die, your policy will payout a lump sum of money within a few weeks of your death certificate being issued. That money is to help look after those who matter to you that you leave behind.
The amount of money and who gets it to is up to you.
When you take out your policy, you choose the amount of money you want to be insured for. Deciding how much that is will depend on things like:
- your budget and how much you can afford to pay in premiums,
- how much money you want to be available to your loved ones after you're gone.
Who gets the money also depends on how you set up the policy when you started it.
- If you are the Policy Owner and the person whose life is insured, the money will become part of your estate and be distributed according to instructions you make in your Will.
- If you name someone else as the Policy Owner, the money will go directly to them.
But wait, there's more.
A Pinnacle Life policy will also payout if you are diagnosed with a terminal illness and are expected to live less than 6-12 months (the time frame depends on the specific wording of your policy). A terminal illness is when you've been diagnosed with something that can't be cured, and that is expected to lead to you dying.
You can choose to have the whole amount of your policy paid out or just part of it. How you use this money is entirely up to you. You could use it to make your last months more comfortable, to make alterations to your home, for a last family holiday, anything you need. The intention is that you can use your insurance money in whatever way your family needs.
What isn't covered
let's be clear about when a life insurance policy will not payout.
- For a Pinnacle Life policy, you must have had your policy for 13 months before you are covered for suicide. The industry does this to ensure we aren't providing any incentive for someone to consider taking their own life.
- We won't payout if you die whilst base jumping, trans-ocean solo-sailing, caving or canyoning. These are extremely high-risk activities that would mean policies would be more expensive if we were to include them.
- We also won't payout if you die whilst on deployment with the armed force/peace corps or if you're a journalist or news camera person working outside New Zealand, Australia, UK, Ireland, USA, Canada, Hong Kong or Singapore. These, too, are considered high-risk activities.
What about Critical Illness or Trauma Cover?
As well as getting insurance for when you die, you can add on extra cover that will payout if you get very ill or suffer a 'trauma'. These add-ons are called Critical Illness and Disability Cover. They cannot be purchased on their own, only as add-ons to life insurance. (A bit like buying windshield cover on your car insurance.)
These policies cover particular illnesses and injuries, which you can read about in other blogs and our website.
Life Insurance is more straightforward than people think, but it may seem hard, because it means we have to think about scary things like 'what will happen to my family if I die'. Sadly, if you're dead, you're dead, and that’s what life insurance is there for.
