Non-Disclosure and Life Insurance Claims in NZ (2026): What You Must Tell the Insurer

Most NZ life insurance claims are paid. The ones that aren't are usually declined for non-disclosure — something left off the application. Here is what you must tell the insurer, how the disclosure rules are changing, and how to avoid a declined claim.

When a life insurance claim is declined in New Zealand, the reason is usually the same: something the insurer should have known was left off the application. It is rarely fraud. More often it is a forgotten condition, a vague answer, or a question the applicant did not think mattered. This guide explains the duty of disclosure as it stands now, how it is changing under the Contracts of Insurance Act 2024, what counts as non-disclosure, what an insurer can do about it, and the practical steps that keep a claim payable.

TL;DR: Industry-wide, only about 3-5% of NZ life insurance claims are declined, and those are almost always for non-disclosure of a health condition at application ⁶. The duty of disclosure still applies today; from a date set by 15 November 2027 at the latest, the Contracts of Insurance Act 2024 replaces it with a duty to take reasonable care not to make a misrepresentation, with fairer, proportionate remedies ¹³. Honestly forgetting something is treated very differently from deliberately hiding it ⁴.

What is the duty of disclosure on a NZ life insurance application?

When you apply for life insurance in New Zealand, you and the insurer enter what the law calls a contract of "utmost good faith". In plain terms, the insurer is relying on what you tell it, so the law requires you to be honest and complete about the things that affect the risk it is taking on.

Under the rules that apply today — the Insurance Law Reform Act 1977 together with the long-standing common-law duty of disclosure ¹ — that means telling the insurer about anything a prudent insurer would consider material when deciding whether to offer cover and on what terms. In practice this covers your medical history, smoking status, height and weight, family history, occupation, pastimes and similar. The insurer turns these into the questions on the application form, but the duty has historically gone wider than the specific questions asked.

This is the part many people miss. Disclosure is not only about answering the questions in front of you accurately. It has also meant volunteering relevant information even where no question quite captured it — a wider, somewhat open-ended obligation that the law is now moving away from, as the next section explains.

Full and accurate disclosure at application is what protects a claim later. The insurer assesses your risk once, at the start, so that when a claim arrives it is not investigating your health from scratch. Whether a claim is paid depends on the terms, conditions, exclusions, stand-down periods and underwriting of the specific policy, and on your disclosure. This is a summary only — always read the policy wording or product disclosure statement.

How is the duty changing in 2026 under the Contracts of Insurance Act?

The Contracts of Insurance Act 2024 received Royal Assent on 15 November 2024. It comes into force on a date set by Order in Council, or three years from assent at the latest — giving a backstop commencement date of 15 November 2027. As at the date this article was reviewed, the new disclosure duty had not yet commenced, so the existing regime described above still governs applications ¹.

When it does take effect, the Act makes two important changes for consumers.

First, the consumer duty of disclosure is replaced by a duty to take reasonable care not to make a misrepresentation ². You will be judged against the standard of a reasonable policyholder, taking your particular circumstances into account. The open-ended obligation to volunteer anything "material" goes; instead, the onus shifts to insurers to ask clear, specific questions. Generic catch-all requests — "tell us anything else that might be relevant" — can no longer be relied on the way they once were ².

Second, the all-or-nothing outcome is replaced with proportionate remedies ³, covered in detail further down.

The table below sets out the shift.

Source: Ministry of Business, Innovation & Employment (MBIE), Contracts of Insurance Act 2024 ¹²³.

The direction of travel is fairer to consumers. But until commencement, the older and stricter rules still apply — so the practical advice in this article does not change: answer everything fully and accurately.

What counts as non-disclosure, and is forgetting the same as lying?

Non-disclosure simply means relevant information the insurer needed was not provided — whether by leaving a question blank, giving an incomplete answer, or, under today's rules, failing to volunteer something material. It ranges from an honest oversight at one end to deliberate concealment at the other, and the law is increasingly alert to that difference.

Under the current regime the consequences could be severe even where the omission was innocent, because the remedy was largely all-or-nothing. The Contracts of Insurance Act 2024 changes that. For a consumer policyholder, a misrepresentation is treated as deliberate or reckless only if you knew the statement was untrue or misleading (or did not care), and knew the matter was relevant to the insurer (or did not care) ⁴.

That test matters. It means honest, careless or genuinely forgotten omissions are treated less harshly than deliberate non-disclosure ⁴. So no — under the new Act, forgetting is not the same as lying. Someone who genuinely overlooked an old, resolved condition is in a very different position from someone who knew about a recent diagnosis and chose to hide it.

That said, two cautions apply. First, this protection is part of the new Act, which is not yet in force. Second, even "honest" non-disclosure can still affect a claim — it may mean the insurer would have priced or worded the policy differently, which feeds into the proportionate remedies below. The lesson is the same either way: it is far easier to disclose at the start than to argue about your state of mind at claim time.

What can an insurer do if you didn't disclose something?

Under the current all-or-nothing regime, an insurer that establishes material non-disclosure has historically been able to avoid the policy — treat it as though it never existed — and decline the claim ³. That is the outcome people fear, and it is why non-disclosure dominates declined-claim disputes.

The Contracts of Insurance Act 2024 replaces this with three-tier proportionate remedies that scale to fault ³:

• Deliberate or reckless misrepresentation — the insurer may avoid the contract, refuse all claims and keep the premium.
• Neither deliberate nor reckless, and the insurer would not have offered cover at all — the insurer may avoid and refuse claims, but must return the premium.
• Neither deliberate nor reckless, and the insurer would have offered cover on different terms — the insurer may apply those terms (for example an exclusion) or reduce the claim payment proportionately, rather than declining outright.

That third tier is the meaningful change for ordinary applicants. Instead of an innocent omission wiping out an entire claim, the insurer is generally limited to the position it would have been in had it known — perhaps a smaller payment, or a claim assessed as if an exclusion had been in place ³. It is a fairer match between the mistake and the consequence.

The Financial Markets Authority has written to insurers setting out its expectations for implementing the Act ahead of commencement, reinforcing that material non-disclosure and exclusion disputes remain a regulatory focus in declined life and health claims ⁹. So while the remedies are softening, scrutiny of how these cases are handled is not.

How do underwriters actually check your medical history at claim time?

When a claim is lodged — particularly an early one, or one involving a condition that existed before cover started — the insurer can review your medical records to confirm the application was answered accurately. With your authority (given as part of claiming), it can request reports from your GP and specialists, and compare what is in your medical notes against what you declared.

This is why a forgotten consultation or a condition mentioned to a doctor years ago can resurface. The records often show more than people remember, and a gap between the notes and the application is exactly what an assessor looks for. It is not an attempt to trip you up; it is the insurer confirming the risk it priced is the risk it actually took on.

It helps to keep this in proportion. The large majority of NZ life and health claims are paid. Industry-wide, only about 3-5% of life insurance claims are declined, almost always for non-disclosure of health conditions at application, and roughly 5,000 life insurance claims are paid each year in New Zealand ⁶. Insurer-published acceptance rates sit in the low-to-high 90s — for example Asteron Life around 97%, Partners Life around 95%, and AIA New Zealand around 92% ⁸. AIA New Zealand reported paying more than NZ$790 million in claims across 2025, with 91% of all claims accepted, including NZ$257 million in life claims ⁷.

The takeaway is reassuring and practical at once: claims are paid far more often than not, and the small minority that are not usually trace back to something missing on the original form.

What should you do if you think you left something off your application?

If you suspect a condition, medication or detail was missed — whether on a recent application or an older policy still in force — the worst option is to do nothing and hope it never comes up. It is straightforward to correct, and far cheaper to fix now than at claim time.

A sensible sequence:

1. Write down what was missed — the condition or detail, the rough dates, and any treatment or test results, as best you can recall.

2. Check your records — your own notes, or a copy of your medical records from your GP, will fill the gaps and stop you guessing.

3. Notify the insurer (usually through your adviser) — provide the information so it can be assessed properly. The insurer may confirm no change, adjust terms, add an exclusion, or revise the premium.

4. Keep the confirmation in writing — so the corrected position is on record.

Disclosing late is almost always better than not disclosing at all. An insurer that receives the information and reassesses the policy can put accurate terms in place, which is precisely what protects the claim. Leaving a known gap unaddressed is the situation the rules — old and new — are least forgiving of.

If you are weighing up a condition that pre-dates an application, our guide to pre-existing conditions and your insurance options walks through how these are typically handled.

How does an adviser reduce your non-disclosure risk?

A good adviser's job here is largely about getting the disclosure right the first time, then making sure it actually reaches the insurer. In practice that means:

• Asking the questions properly — prompting for conditions, medications, tests and earlier insurance decisions that people commonly forget, so answers are complete rather than rushed.
• Helping you interpret the questions — explaining what a question is really asking, so a vague or partial answer doesn't slip through.
• Passing disclosure on accurately — the Contracts of Insurance Act 2024 gives intermediaries (advisers and brokers) a duty to take reasonable steps to pass on to the insurer what you have disclosed to them before the contract starts or is varied, and gives insurers rights to claim against specified intermediaries who fail to do so ⁵. This formalises a responsibility good advisers already take seriously.
• Placing the application well — because insurers assess conditions differently, putting the case where it is most likely to be accepted on fair terms, which we cover in how advisers compare insurers in NZ.
• Keeping a record — so what was disclosed, and when, is documented if a claim is ever questioned.

There is also a duty behind that work. As a licensed financial advice provider, we must give priority to your interests where there is a conflict and not provide information that is false or misleading. Disclosure done carefully at the start, and structured cover that fits your situation — set out in how an adviser structures life cover — is what makes a policy more likely to do its job when it is called on.

We work with a panel of selected insurers, listed in our disclosure, rather than every provider in the market. We're generally paid by commission from the insurer when you take out a policy through us; this doesn't change the premium you pay, and we manage any conflicts of interest in line with our duty to prioritise your interests — full details are in our disclosure.

Frequently asked questions

What is non-disclosure in life insurance?

Non-disclosure means relevant information the insurer needed was not provided — by leaving a question blank, giving an incomplete answer, or (under current rules) failing to volunteer something material. It is the most common reason life insurance claims are declined in New Zealand, accounting for the small minority of claims that are not paid ⁶.

Is forgetting to disclose something the same as lying?

No. Under the Contracts of Insurance Act 2024, a misrepresentation is only treated as deliberate or reckless if you knew the answer was untrue or misleading (or did not care) and knew the matter was relevant (or did not care) ⁴. Honest or forgotten omissions are treated less harshly. That said, even innocent non-disclosure can still affect what the insurer pays, so disclosing fully at the start is always safest.

Can an insurer decline my whole claim for one missing detail?

Under the current all-or-nothing regime an insurer can avoid a policy for material non-disclosure ³. The Contracts of Insurance Act 2024 introduces proportionate remedies: for an innocent omission where the insurer would have offered cover on different terms, it may apply those terms or reduce the payment proportionately rather than declining outright ³. The Act commences by 15 November 2027 at the latest and is not yet in force ¹.

How often are life insurance claims actually paid in NZ?

The large majority are paid. Industry-wide, only about 3-5% of life claims are declined, almost always for non-disclosure, with roughly 5,000 life claims paid each year ⁶. Insurer acceptance rates sit in the low-to-high 90s — for example Asteron Life around 97%, Partners Life around 95% and AIA around 92% ⁸.

What should I do if I realise I left something off my application?

Notify the insurer, usually through your adviser, as soon as you can. Write down the missed detail and dates, check your medical records, and provide the information so the policy can be reassessed ⁹. The insurer may confirm no change, adjust terms, add an exclusion or revise the premium. Correcting it now is far better than leaving a gap that surfaces at claim time.

Will the new rules apply to my existing policy?

The new disclosure duty has not yet commenced and applies from a date set by 15 November 2027 at the latest ¹. Until then the existing duty of disclosure governs applications. How the Act applies to policies already in force will depend on the commencement and transitional arrangements — this is general information, so check the position for your own policy.

This article is general information only and is not personalised financial advice. It does not take into account your particular financial situation, goals or needs. Before acting, consider whether it's right for you and seek advice tailored to your circumstances. Whether a claim is paid depends on the terms, conditions, exclusions, stand-down periods and underwriting of the specific policy, and on your disclosure — always read the policy wording. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority to provide financial advice on personal risk insurance, health insurance, general insurance, KiwiSaver and managed funds, and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 7 June 2026.