Hi Dave -
Mary from Mico wrote:I think that if you like the site and all else looks bona fide - the main thing is to nofollow the link and open a new window (click the tiles in the link toolbar).
Mary is right about this. As you already know, if it's a paid-for link, it's important to make the link "nofollow".
You've said that you're comfortable with the quality of the travel insurance company's website. Are you also satisfied that it's a reputable company
? There are lots of fly-by-night insurance "agencies" out there, and many of them have really spiffy looking websites. But when all is said and done, their products, and/or their customer service practices, and/or their claims-paying history, stink.
If the product is right for your visitors, and you've "vetted" the company as much as possible to be sure it's legit, I see no reason why you'd decline the company's request to advertise on your site.
That said, once the company learns that their link will be nofollow, don't be surprised if they no longer want to pay for it. If that's the case, then you'll know they were not really on the up-and-up. They were simply looking to tap into your "link juice".
One last thing ... have you looked into travel insurance affiliate programs? I've recently been exploring that avenue of monetization, and it looks like a good option for my Cape Cod travel site. I'm not sure what travel insurance affiliate options you have in NZ, but it might be worth looking into. While $85/year for a paid link would be nice, you might be able to make more in a good affiliate program.
BTW: I love your site! NZ is one of the want-to-visit places on my bucket list.