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Life Insurance Explained - Three Must-Watch Videos to Help You Understand What's Right For You

​We share three essential videos explaining life insurance in plain English. We explain what's covered, costs, claims and pre-existing conditions in our must-watch videos
Updated 28 July 2025

Summary
  • ​Life insurance feels complex because no one wants to think about not being here. But here's the truth - it's one of the most straightforward and loving financial decisions you can make for your family.
  • With mortgage rates creating financial pressure, the rising cost of living squeezing family budgets, and many New Zealanders having little to no emergency savings, the question isn't whether you need life insurance – it's whether your family could maintain their life if your income suddenly stopped.
  • Our comprehensive life insurance comparison shows you real prices and policy options. But numbers only tell half the story. That's why we've partnered with LifeDirect's insurance adviser Steven Hillary to share three essential videos that will transform how you think about protecting your family's future.
  • Steven has spent over 15 years talking with New Zealand families, helping them navigate these emotional decisions. He's seen what happens when families have coverage – and devastatingly, when they don't.
  • These videos distil his experience into just 11 minutes of clear, practical guidance that could be the most important investment of time you make this year.

Our guide covers:
Why We Created Our Video Explainers
​At MoneyHub, we know life insurance isn't just another financial product – it's a promise to the people you love. We work with LifeDirect to create these videos because:
  1. The conversation matters more than the sale: Too many New Zealanders avoid life insurance because they've only encountered pushy salespeople. We believe in education first, pressure never.
  2. Every family is unique: Cookie-cutter calculators don't capture your family's real needs. These videos teach you how to think about protection, not just products.
  3. Clarity beats complexity: Life insurance is simple – it's the industry that complicates it. In under 11 minutes, you'll understand more than most people learn in years.
  4. Starting beats perfecting: We've seen too many families paralysed by trying to find the "perfect" policy. Steven shows you why starting with something beats waiting for everything.
​
What You'll Learn
This carefully curated playlist takes you through everything you need to know about life insurance in New Zealand. We've organised the videos in a logical sequence that builds your knowledge step-by-step:
  • Understanding how much life insurance you need
  • Understanding the true costs involved

Why Watch All the Videos?
While each video stands alone, watching the complete series in the order below gives you a comprehensive understanding that could save you thousands of dollars and prevent costly mistakes. We view it as a valuable consultation with an insurance expert, which allows you to watch it at your own pace, rewind the tricky bits, and share it with family members who need the same guidance.

How to Use This Guide
  1. Start at the beginning: The videos are ordered to build your knowledge progressively
  2. Take notes: Jot down questions or points relevant to your situation
  3. Share with family: These decisions often affect loved ones too
  4. Come back anytime: Bookmark this page for when you're ready to make decisions

Video Guides - Life Insurance Explained

Our three-part video series breaks down complex life insurance topics into digestible, practical (general) advice. Each video is designed to answer the questions that matter most to New Zealanders considering life insurance. LifeDirect's trusted adviser Steven Hillary guides you through every essential aspect.

Part 1: Understanding Life Insurance

Life Insurance in New Zealand - What is it and How Does it Work? - 3:29

Start your journey here. In this essential first video, Steven Hillary cuts through the confusion to explain what life insurance is - and isn't.

Steven reveals why life insurance is fundamentally different from investments or savings accounts: it's purely about protecting the people you love. He breaks down:
  • The simple mechanics: How small regular payments (weekly, fortnightly, or monthly) create a substantial financial safety net for your family
  • The truth about payouts: What happens when a claim is made and how quickly families receive support
  • Common misconceptions: Why thinking of life insurance as an investment is the #1 mistake New Zealanders make

You'll discover how term life insurance works in practice, with Steven walking through real scenarios showing how payouts help families:
  • Keep their home when mortgage payments continue
  • Maintain children's education and daily needs without disruption
  • Cover unexpected costs during the hardest times
  • Provide breathing room to grieve without financial panic

Steven shares a revealing example of a typical New Zealand family's life insurance journey, showing exactly how coverage amounts are calculated and what families use payouts for – insights gained from years of helping clients through claims.

This foundation video provides the clarity you need to decide whether life insurance is a good fit for your situation, setting you up perfectly for the more detailed videos that follow.

Key takeaway: Life insurance isn't about you - it's about ensuring your family's life continues with dignity and choice if you're not there to provide for them.

Part 2: Choosing Your Policy

How to Choose the Right Insurance Policy in NZ - 3:07

In this video, you'll learn:
  • The Protection Priority Method: Steven's proven approach to identifying what truly needs protecting – your income, mortgage, children's future, or business
  • The Coverage Calculator Secret: How to determine the right amount without over-insuring (or dangerously under-insuring)
  • The Premium Puzzle Solved: Stepped vs Level premiums explained with real numbers – and which saves you more long-term
  • Smart Add-Ons vs Money Wasters: When trauma cover, income protection and similar add-ons make sense (and when they're just expensive extras)
  • The Ownership Trap: A critical detail that could delay payouts when your family needs money most
  • The "Start Small" Strategy: Why a basic policy today beats the "perfect" policy you never buy

Steven reveals insider insights, including:
  • Reminding policyholders not to overthink things - the best policy will be simple, affordable and cover the risk you're insuring for
  • Why comparing all options is essential, not just looking at one insurer's products
  • Why the "best" policy is worthless if you can't maintain the premiums - usually, the best life insurance policy isn't the one with the most features – it's the one you can afford to keep when life gets tough.

Part 3: Calculating Your Coverage

How Much Life Insurance do I Actually Need? - 4:07

Steven tackles the million-dollar question (sometimes literally) with refreshing honesty: "There's no magic formula, but there's a simple way to find your number."

Instead of confusing calculators or scare tactics about leaving your family destitute, Steven presents a practical framework that any New Zealand family can use over a cup of coffee.

The Protection Gap Method – Steven's straightforward approach:
First, imagine this scenario: If you weren't here tomorrow, what bills and dreams would still need funding? Steven helps you build your number by considering:
  • Income Replacement: "If you earn $100,000 and want 5 years of support for your family, that's $500,000 right there"
  • Mortgage Freedom: How much is left on your mortgage? This could be your family's biggest burden or biggest relief
  • Kids' Future: School fees, uni costs, and giving them options when you're not there to provide

You can get a baseline amount with a simple life insurance calculator.

The Smart Adjustment Strategy: Your life changes, and so should your coverage. Steven reveals:
  • Why your life insurance can decrease as your mortgage shrinks
  • When to review (hint: it's not annually)
  • How life events trigger coverage adjustments

Steven's Refreshing Take: "Don't let perfect calculations paralyse you. A good estimate that protects your family beats a perfect formula you never act on."

The video concludes with Steven's advice that resonates with every parent: Having these conversations with your partner might feel uncomfortable, but it's one of the most loving things you can do. The best number isn't perfect – it's the one that lets your family maintain their life and choices if you're not there.

Comparing and Buying Life Insurance - Next Steps

Ready to Compare Policies?
  • Use our comprehensive life insurance comparison guide to see real prices from New Zealand's leading insurers. Get instant quotes tailored to your age and needs.

Need Personalised Advice?
Take Action and Make a Decision
If you're still unsure how to proceed, we suggest the following:
  1. Today: Watch the videos and take notes on your key concerns
  2. Tomorrow: Get three to five quotes using LifeDirect's comparison tool
  3. Day 3: Book a consultation if you have specific questions - you will also need to check if your employer offers any life insurance cover or subsidies, list any pre-existing conditions and talk to your partner or family

Our View: Life insurance isn't about predicting the future – it's about protecting your family from one specific risk that would devastate them financially. The best policy isn't the cheapest or most comprehensive; it's the one that ensures your family keeps their home, choices, and dignity if you're not there. Start with what you can afford, adjust as life changes, and never let perfect calculations prevent you from getting good protection.

Frequently Asked Questions

These videos provide general guidance, but we know everyone's situation is unique. We have listed common queries below, but if you'd like personalised advice tailored to your specific circumstances, you can contact the team at LifeDirect.

I don't have kids or a mortgage. Do I need life insurance?

Not necessarily. Life insurance is about protecting people who depend on your income. If you're single with no debts, you likely don't need any life insurance coverage. But if anyone would face financial hardship from your passing – aging parents you support, a partner, or even just covering your funeral costs – it's worth considering. The videos help you identify what (if anything) you need to protect.

How does this differ from the life insurance provided by my KiwiSaver or employer?

Some KiwiSaver investors may already have a small amount of life cover, provided by their Employer and KiwiSaver scheme. However the life insurance often provides basic coverage, but it's rarely enough for families with mortgages or children. Sometimes these policies are a great foundation to build on; other times, they provide false security. The first step to take is find out what you're already covered for (if anything). 

What if I have health issues? Will I be declined or pay a fortune in premiums?

While health conditions affect premiums, being declined isn't as common as people fear. The key is understanding how insurers assess risk and being strategic about applications. Even with conditions like diabetes or a history of cancer, coverage is often possible – you just need to know how to approach it. The videos give you insider knowledge on working with, not against, the underwriting process.

Will these videos try to sell me LifeDirect's services?

No - these are purely educational videos designed to help you understand life insurance concepts. While Steven works for LifeDirect, the videos focus on universal principles that apply regardless of which adviser or insurer you choose. There's no sales pitch or pressure to use any particular service.

Is life insurance worth it when premiums could be invested instead?

​Life insurance isn't an investment - you can't invest your way to $500,000 in protection for $50 a month. Self-insuring through savings alone is a gamble most families can't afford to take, especially in their highest-risk years (young kids, big mortgage).

My partner and I can't agree on how much coverage we need. What is the right amount?

​This is incredibly common. One partner often wants maximum protection while the other focuses on current budget pressures. These videos explain the need to focus on non-negotiables first (such as mortgage and kids' immediate needs), then add "nice-to-haves" as the budget allows. Our life insurance calculator helps create a starting baseline.

I'm worried about the horror stories surrounding the claim. How do I ensure my family gets paid?

​Most claims are paid without issue, but the horror stories make headlines. The videos reveal exactly what causes claim problems - usually non-disclosure at the application stage, not insurer tricks. Simple practices, such as honest applications and regular reviews, eliminate almost all claim issues.

Should both partners have life insurance, or should it be limited to the main income earner?

​This catches many families off guard. The non-working or lower-earning partner often provides childcare, household management, and support worth tens of thousands annually. The death of either partner creates both emotional trauma and financial burden. What's right for you will come down to careful consideration. 

How do I know if I'm overpaying for life insurance?

​Many New Zealanders pay too much because they don't understand premium structures or haven't reviewed coverage as circumstances have changed. Steven reveals the three main ways people overpay: selecting the wrong premium type for their situation, coverage that hasn't adjusted as mortgage rates decrease, and expensive add-ons they don't need. After watching, you'll know exactly what questions to ask your current insurer.

Can I change insurers if I find a better deal later?

Yes, but we suggest that you never cancel existing coverage until new coverage is confirmed. Understand how age affects new premiums and know which benefits might not transfer.

What's the catch? Why are these videos free if they're so valuable?

There is no catch, just aligned interests. MoneyHub believes informed consumers make better decisions. LifeDirect knows educated clients buy appropriate coverage and keep it longer. Steven's reputation is built on helping, not selling. Everyone wins when you understand what you're buying. The videos contain zero sales pressure because confident, informed decisions don't require pressure.

What if I have questions after watching the videos?

The videos are designed to answer the most common questions, but everyone's situation is unique. You can explore our detailed written guides, use our comparison tools, or speak with an independent adviser (like Steven) for personalised advice - you can visit the LifeDirect website to get instant quotes as a starting point.
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