The short answer
In New Zealand, insurance advisers are generally paid commission by the insurer, and the premium you pay is typically the same whether you buy direct or through an adviser. So the honest question is not "does it cost more" — it is "what do I get".
What you get is: the market compared rather than one insurer, underwriting handled by someone who knows which insurer treats your specific health history most favourably, policy wordings read properly, and someone whose job it is to argue your corner at claim time.
Last reviewed 2026-07-30
What an adviser actually does
| Task | Buying direct | Through an adviser |
|---|---|---|
| Comparing insurers | You compare, on price | They compare on price, wording and underwriting appetite |
| Choosing sum insured | You decide | Built from your debts, dependants and income |
| Health disclosure | You fill the form | Guided — which reduces non-disclosure risk |
| A loading or exclusion | You accept or walk away | Often re-shopped or negotiated |
| Reading the wording | You, if you do | Their job |
| Structure (level/stepped, ownership) | You choose blind | Advised, with reasons on record |
| At claim time | You and the insurer | They advocate for you |
| Cost to you | Premium | Usually the same premium |
The two places it matters most
Underwriting, if you have any health history
Insurers differ enormously in how they treat specific conditions. One will decline a condition another will accept at standard rates. Someone who places policies every week knows those patterns; a comparison website does not. For a healthy 28-year-old this is worth little. For a 46-year-old with a thyroid condition and a family history it can be the difference between cover and no cover.
At claim time
This is the part people discover too late. A claim is a process — forms, medical evidence, definitions, sometimes a dispute about whether a condition meets a threshold. Doing that alone while seriously ill, or while grieving, is genuinely hard. An adviser who placed the policy knows what was disclosed, what the wording says, and who to call.
Nobody reads a policy wording on the day they are diagnosed.
The honest case for buying direct
Buying direct is perfectly sensible when:
- You are young, healthy, and buying a simple, modest amount of life cover.
- You genuinely enjoy reading policy documents and will actually do it.
- You are covered by a good group scheme and just topping up.
- You have already had advice, understand the structure you want, and are re-buying the same thing.
The failure mode of buying direct is not usually paying too much. It is buying the wrong shape — a four-week wait period you did not need, a two-year benefit period you did need to be longer, accelerated trauma you did not know would erode your life cover, or a health policy switch that quietly dropped cover for the condition you already have.
How commission works, plainly
Advisers are typically paid an upfront commission by the insurer when a policy is placed, and often a smaller ongoing servicing commission. Since the premium is generally the same either way, the commission comes out of the insurer's margin rather than being added to your price.
The obvious conflict is that commission is proportional to premium, which creates an incentive toward larger policies. Licensed advisers in New Zealand operate under a statutory duty to put the client's interests first and must disclose how they are paid. That is a real constraint, but you should still ask directly how they are paid and what they would earn — a good adviser will answer without flinching.
Questions worth asking any adviser
- How are you paid, and what would you earn from this policy?
- How many insurers can you place business with, and did you consider more than one here?
- Why this insurer for me specifically — what is it about my situation?
- Stepped or level, and why?
- If I claimed, what exactly would you do?
- What are the exclusions on my policy and why are they there?
Common follow-up questions
Do insurance brokers charge a fee in New Zealand?
Most personal insurance advisers do not charge the client a fee — they are paid commission by the insurer. Some charge a fee for advice instead of, or as well as, commission, particularly for complex business or estate work. Either way, they must disclose it. Ask up front.
Will an adviser get me a cheaper premium?
Sometimes, because they can see the whole market and published NZ comparisons find roughly a 30% spread between cheapest and dearest for identical cover. But cheaper is not the main argument — better-shaped cover, better underwriting outcomes and support at claim time are. If an adviser is selling purely on price, that is a signal in itself.
What does "licensed" mean here?
Since the 2019 reforms, anyone giving regulated financial advice to retail clients in New Zealand must do so under a Financial Advice Provider licence issued by the FMA, and is subject to statutory duties including putting the client's interests first and meeting competence standards. You can check who holds a licence on the Financial Service Providers Register.
Keep reading
This page is general information about how insurance works in New Zealand. It is not regulated financial advice and it does not take your situation into account. For advice about your own cover, talk to a licensed financial adviser.