Cancer Causes 55% Of Life Insurance Claims While 85% Of Households Remain Underinsured, New Claims Data Reveals

New analysis of life insurance claims data published by MoneyHub reveals that cancer is responsible for 55% of all life insurance payouts – far more than any other cause – while an estimated 85% of New Zealand households remain underinsured by 28–40%.

The research, based on claims data from one of New Zealand’s largest independent insurance advisers covering the past 12 months, combined with industry-wide statistics, shows the average life insurance payout is $350,000. However, MoneyHub’s analysis suggests most families need significantly more – particularly given the median Auckland house price exceeds $1 million.

Key findings from the analysis include:

• Average payout: $350,000 – but most families need $1 million or more to cover mortgages, children’s education, and income replacement
• Cancer dominates claims: 55% of payouts follow cancer deaths, including breast, bowel, lung, melanoma, and prostate cancers affecting working-age New Zealanders
• Heart-related deaths: 22% of claims – often sudden and unexpected, with someone going to work healthy and not coming home
• Claims rarely declined: Only 3–5% industry-wide, almost always for non-disclosure of health conditions
• How payouts are used: 50% goes to mortgage repayment, 30% to children’s education, and 20% to income replacement
• Income replacement shortfall: A $350,000 payout provides only 3.5 years of replacement for someone earning $100,000 – often the biggest gap

“The average payout of $350,000 sounds like a lot until you consider what it needs to cover,” said Christopher Walsh, Founder of MoneyHub. “A $600,000 mortgage alone would consume most of it. Then there’s children’s education at $100,000–$300,000 per child, plus income replacement. Most New Zealanders need more life insurance than they think, and the cost of adequate cover is lower than most people assume.”

Walsh noted that the data challenges common assumptions about life insurance: “The question isn’t whether you can afford life insurance – it’s whether your family can afford for you not to have it. Cancer doesn’t discriminate by age. Working-age New Zealanders in their 30s, 40s, and 50s are diagnosed regularly.”

The full analysis, including claims breakdowns, payout data, and coverage calculators, is available in MoneyHub’s guide: Life Insurance Claims Statistics NZ

Data Source: Claims data from one of New Zealand’s largest independent insurance advisers (12-month period to December 2025), combined with industry-wide statistics from insurance industry bodies and insurer publications.

About MoneyHub

MoneyHub is New Zealand’s leading independent financial guidance website, offering free research, tools, and guides to help New Zealanders make better money decisions.

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