Plain language law

New Zealand law explained for everyone

 Plain Language Law homepage
Back to
EY 7: Meaning of claim
or “What counts as a claim for life insurance payments”
You could also call this:

“Explanation of what counts as life insurance for tax purposes”

Life insurance is when you pay someone (called a life insurer) to give money or other benefits to you or someone else when certain things happen. These things can be:

  1. When someone dies
  2. When someone lives to a certain age or date
  3. When someone gets regular payments for a set time, even if it’s not based on how long they live

The insurer gets money for providing this insurance. This money can come from you or someone else.

Life insurance is different from accident or medical insurance. Accident or medical insurance might pay if someone dies, but only if they die from specific causes listed in the policy. It’s not considered life insurance if it only pays for death in certain situations or if the death benefit is just a small part of the main medical or accident coverage.

Life insurance also doesn’t include certain arrangements with superannuation funds. These are special savings accounts for retirement. If a superannuation fund pays out money when someone dies or reaches a certain age, it’s not life insurance if the money comes from:

  1. Contributions made to the fund
  2. Investment earnings from those contributions
  3. Other profits from the fund that are linked to those contributions

This is the legal definition of life insurance in New Zealand’s tax laws. It helps decide how these insurance policies are treated for tax purposes.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

Next up: EY 9: Meaning of life insurance policy

or “What a life insurance policy means and covers”
Next

Part E Timing and quantifying rules
Life insurance rules

EY 8Meaning of life insurance

  1. Life insurance means insurance under which—

  2. person A (the life insurer) is liable to provide person B (the policyholder) with a benefit described in subsection (2); and
    1. the life insurer is entitled to receive consideration in return, either from the policyholder or from some other person.

      1. The benefits are—

      2. a benefit whose payment is contingent on the death of 1 or more human beings, including an annuity whose term is contingent on human life; or
        1. a benefit whose payment is contingent on the survival of 1 or more human beings to a date, or an age, specified as part of the insurance, including an annuity whose term is contingent on human life; or
          1. a benefit that is an annuity whose term is not contingent on human life, if the life insurer enters into the arrangement to provide the annuity as part of their business of providing life insurance.

            1. Life insurance does not include accident or medical insurance under which—

            2. 1 or more benefits are payable for the death of the person whose life is insured; and
              1. all the benefits referred to in paragraph (a) are—
                1. payable if the death is caused by a specified cause named in the policy; or
                  1. payable incidentally to the provision of accident or medical benefits, if the death is caused by a specified cause named in the policy.

                  2. Life insurance does not include an arrangement in which—

                  3. a superannuation fund is liable to pay, as a benefit to a beneficiary of the fund, a lump sum on—
                    1. the death of 1 or more human beings specified in the trust deed; or
                      1. the survival of 1 or more human beings specified in the trust deed to a date, or an age, specified in the trust deed; and
                      2. the lump sum is made up of—
                        1. superannuation contributions made by or for the beneficiary; and
                          1. allocated investment earnings attributable to contributions made by or for the beneficiary; and
                            1. any other allocation from the profits of the superannuation fund attributable to contributions made by or for the beneficiary.

                            Compare