Confused by insurance and KiwiSaver jargon? This glossary explains over 100 common terms in plain English, with a New Zealand focus. Whether you’re comparing life insurance, choosing a KiwiSaver fund, or trying to understand income protection, this guide breaks it down.

Why This Glossary Matters

Insurance and KiwiSaver can feel overwhelming. Policies, fund types, exclusions, and investment terms are often written in technical language. This glossary is designed to:

• ✅ Help everyday New Zealanders understand key financial terms.

• ✅ Support people comparing insurance or KiwiSaver providers.

• ✅ Improve transparency and build confidence when making decisions.

A–C

Acceleration Benefit

An early payment of trauma or TPD cover from your life insurance, which reduces the life sum insured.

Accidental Death Cover

A lump sum payout if death is caused by accident, not illness.

Agreed Value (Income Protection)

A type of cover where your monthly benefit is fixed at application, regardless of income changes.

Annual KiwiSaver Year

Runs from 1 July–30 June. Used to calculate government contributions.

Asset Allocation

The mix of growth vs income assets in a KiwiSaver fund, which determines risk and potential return.

Balanced Fund (KiwiSaver)

A medium-risk KiwiSaver fund, usually 40–60% growth assets and 40–60% income assets.

Beneficiary

The person or people who receive your insurance payout if you pass away.

Benefit Amount

The payout amount specified in your insurance policy.

Benefit Period

How long income protection benefits are paid (e.g., 2 years, 5 years, or until age 65).

Binding Nomination

Formally naming who receives your life cover payout.

Buy-Back Option

Lets you restore life cover after a trauma or TPD claim reduces it.

D–F

Default Fund (KiwiSaver)

The fund type you’re placed in if you don’t actively choose. Since 2021, defaults are balanced funds.

Deferred Period (Waiting Period)

The time you wait before income protection or mortgage protection payments start.

Diversification

Spreading investments across multiple assets to reduce risk.

Dollar-Cost Averaging

Contributing regularly into KiwiSaver, which smooths returns over time.

Endorsement

A written amendment or addition to your insurance policy.

Exclusions

Specific conditions or situations not covered by your policy.

FMA (Financial Markets Authority)

The regulator overseeing KiwiSaver and financial advice in New Zealand.

First Home Withdrawal (KiwiSaver)

You can use most of your KiwiSaver balance for a first home deposit after 3+ years of contributions.

Fund Manager

The team or company that invests your KiwiSaver savings.

G–I

Government Contribution (Member Tax Credit)

The Government contributes up to $260.72/year if you put in at least $1,042.86 (1 July–30 June).

Growth Fund (KiwiSaver)

Higher-risk, higher-return fund with majority investments in shares and property.

Guaranteed Insurability

Lets you increase cover at major life events without new medical checks.

Hardship Withdrawal (KiwiSaver)

Early KiwiSaver withdrawal allowed in cases of serious financial hardship.

Health Insurance (Private Medical)

Covers private hospital treatment, surgery, specialists, and some medications.

Indexation (Inflation Protection)

When your insurance cover increases annually to keep pace with inflation.

Income Protection Insurance

Pays a monthly benefit if you’re unable to work due to illness or injury.

J–M

KiwiSaver

A voluntary, government-supported retirement savings scheme. Accessible at 65 or earlier for a first home or in cases of hardship.

KiwiSaver Provider

The company managing your KiwiSaver account (e.g., a bank, insurer, or investment firm).

Lapse

When an insurance policy ends due to unpaid premiums.

Level Premiums

Premiums designed to stay consistent over time, rather than increasing with age.

Life Insurance

Pays a lump sum to your family if you die or are diagnosed with a terminal illness.

Loadings

An extra cost added to your premium due to health, lifestyle, or occupation risk factors.

Management Fee (KiwiSaver)

Percentage charged by providers to manage your fund.

Market Volatility

The ups and downs of investment returns. Normal in growth-oriented KiwiSaver funds.

Mortgage Protection Insurance

Helps cover your mortgage repayments if you’re unable to work due to illness or injury.

N–R

Non-Disclosure

When you don’t share important health or lifestyle details when applying for insurance. Can affect future claims.

PIR (Prescribed Investor Rate)

Your personal tax rate applied to KiwiSaver investment earnings.

Policy Anniversary

The yearly date when your premiums and cover may adjust.

Policy Rider

An add-on to your policy, such as children’s trauma cover.

Portfolio Investment Entity (PIE)

The tax structure KiwiSaver funds use for efficiency.

Premium

The regular amount you pay for insurance (weekly, monthly, or annually).

Reinstatement Option

Lets you restore trauma cover after a claim and waiting period.

Retirement Withdrawal (KiwiSaver)

At 65, you can access all or part of your KiwiSaver savings.

Risk Profile

Your tolerance for investment risk in KiwiSaver (conservative, balanced, growth, aggressive).

S–Z

Savings Suspension

Pausing KiwiSaver contributions (previously called “contribution holiday”).

Stand-Alone Cover

Trauma or TPD insurance that doesn’t reduce life cover if claimed.

Stepped Premiums

Premiums that start lower but increase with age.

Sum Insured

The maximum payout under your policy.

Tactical Asset Allocation

Adjusting KiwiSaver portfolios based on short-term market conditions.

Terminal Illness Benefit

An early payout of life insurance if you’re expected to live less than 12 months.

Total & Permanent Disability (TPD) Insurance

A lump sum payout if you become permanently unable to work.

Transfer (KiwiSaver)

Moving your KiwiSaver account to another provider.

Underwriting

The process insurers use to assess your health, lifestyle, and occupation before approving cover.

Unit Price (KiwiSaver)

The daily value of each unit in your KiwiSaver fund.

Voluntary Contributions

Extra payments you make directly into KiwiSaver.

Withdrawal for First Home

After 3 years, you can withdraw most of your KiwiSaver savings to buy a first home.

Withdrawal at 65

At NZ retirement age, you can take KiwiSaver out as a lump sum, leave it invested, or set up regular withdrawals.

Insurance is about protecting your family today. KiwiSaver is about building security for tomorrow. Together, they give New Zealanders a financial safety net.

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