Life insurance policies generally have a range of built-in benefits, which add to the standard cover of a lump sum that is paid out in the event of death or terminal illness. A fairly common example is a financial planning benefit, which pays an additional amount (often around $2,000) to help with the cost of hiring a financial planner to decide how to best use a life insurance payout. Also, plans will usually have a built-in ability to increase your life insurance amount in the event that you experience certain "life events". These life events include things like having a child, taking out a mortgage, or getting married. If one of these occurs, you are able to increase your insured amount without having to submit another application and provide medical information. This is very useful, as health can change, so without this kind of feature increasing your cover when you need to can be difficult.

A less common feature that can be built in to life insurance policies is what is known as a "special events conversion" option. We will take a quick look at how this works and how you can use it if this is a feature of your life insurance plan.

First of all, a "special events conversion" option is similar to a "special events increase" option in that it is dependent on you experiencing the kind of life events (getting married, taking out a mortgage, having a child, etc) mentioned above. The difference is that while a special events increase option will allow you to increase your existing New Zealand life insurance lump sum, a special events conversion option will actually allow you to add a completely difference kind of insurance to your policy.

As an example of how this works, let’s say that you buy life insurance NZ policy in place, and take out a mortgage. Because you have a mortgage, you want to add some additional protection in the form of "trauma insurance" (trauma insurance pays a lump sum in the event that you suffered a health condition – cancer, stroke, heart disease, etc – covered by the policy). Usually this addition would be treated as a totally new policy, which would mean that you would need to apply for the new insurance by completing an application form. This would then be assessed by the insurance company, and following this, the cover would be set up. However if you have a "special events conversion" option on your life insurance NZ policy, the process is very different. All you need to do is give the insurer written confirmation that you would like to add the new cover, and they will add it. There is no application form or health information required – which can be very important if you have any health issues that might affect your insurance.

There are some things to be aware of, and this type of option is not available in all situations. For example there is often an age limit – so additions can’t be made if you are over a certain age. Also the amount of insurance you can add will be limited, meaning that you can’t simply choose any sum you would like. However these types of considerations aside, a special events conversion option can make things very simple if you want to add some extra insurance to your existing New Zealand life insurance option.

So, if you are considering a life insurance NZ plan, then it pays to ask if this kind of feature is available. This alone is not a reason to choose one insurance plan over another, however if you are considering two insurers with nothing else separating them, then it would be worth considering.