Congratulations on taking the time to review your Business Insurance!
When a business loses the owner, a business partner, a sole trader or key employee, on a short term or permanent basis the consequences can be significant. Loans may have to be re-paid at short notice, Profits can fall and simply the viability of the business can come under threat.
Only 9% of Businesses in New Zealand take out Business Life Insurances!
We work with you to do a thorough but straightforward needs analysis to determine what will happen in the event of a claim given different scenarios. We understand this in the first instance before recommending solutions from the leading Life Insurance companies in New Zealand.
If you have business debt including any signed personal guarantees to a 3rd party, it is vital that the business owners have Life Insurance and Disability cover for these amounts. (Trauma and Disability covers). The sums should reflect the debt and personal guarantees owning as far as reasonably possible.
Key Man Insurance
This is about protecting profit and more specifically the profit generators in your business. This may or may not be the owners. Protection here can be in the form of Lump Sum benefits for Life, Trauma or Disability covers for relocation recruitment and training costs. It also typically includes the payment of monthly income to enable the replacement of the key person for a specified period – e.g. 6 or 12 months.
Buy Sell Cover and Agreements
Buy Sell Cover is required to ensure that shareholders receive the appropriate $ value for their shares when a shareholder is required to exit the business due to accident or illness. Typically shares are paid out at the agreed/insured amount and are transferred to the surviving shareholder(s). The Buy Sell Agreement, usually part of the Shareholders Agreement governs this process.
We believe that Shareholders should protect against the loss of future earnings (say 5yrs) in the event of the death or disability of a shareholder i.e. Call it ROI or Return on your Investment in the event of the unexpected. For most small businesses the owner is the business. If they became disabled and had to sell they would often get very little for the business asset they had worked so hard to built up. Insurance in this scenario can go a long way to recognising a return on what the business owner has built up. Solutions here will range from Life Cover, Trauma Cover and Total Permanent Disability as well as innovative lump sum benefits for loss of future earnings.
Speak to us about a world 1st designed for small business in this area – Total Long Term Disability!
“One liner Definitions” of Business Life Insurance Covers
Key Person Cover /Business Income Protection – 2nd Most Claimed to Health Insurance
Is a monthly pay-out to help you pay for your business expenses and/or a locum in the event of illness or a serious accident. Most insurance companies will pay this monthly amount for 12 months although options for 24 and 36 months are available.
Total Long Term Disability – WORLD FIRST!
Lump Sum tax free pay-out where one is unable to work for 9 months! Where unable to work for 3 months and where this is likely to prevent them from being able to go back to work for a further 6 months. As a hybrid it covers Death, Permanent Disability and disability for 9 months in one cover! It is not only a flexible solution with a lower bar to claim , it is also very cost effective.
Trauma Cover – 3rd Most Claimed
Lump sum tax free pay-out if one is diagnosed with a critical illness or trauma, the most common being heart, stroke, cancer. Leading insurers offer up to 57 conditions these days. Sadly cancer is now NZ’s no:1 claimed condition.
Total Permanent Disability – 4th Most Claimed
Lump sum tax free pay-out in the event that one can’t do one’s specific job again due to illness or serious accident. (Own Occupation cover)
Life Insurance - 5th Most Claimed
Lump sum tax free pay-out in the event of one’s death or terminal illness diagnosis.