Business Buy Sell Insurance

Business Buy Sell Insurance

In New Zealand, the majority of businesses are limited liability companies or partnerships, typically involving two or more people. Each person provides something the business needs, such as money, skill or knowledge.

In a business, as well as sharing the profits, you also share in the losses. And when it comes to losses, the greatest loss to a business is that of a business owner. So is your business ready for anything? What if one of your business partners were to die or become permanently disabled?

Could you afford to buy their share from their estate? If not, you could be forced into business with your business partner’s spouse, or forced to wind up the business. Unless, of course, you have a buy-sell agreement in place.

Frequently Asked Questions

  • How much cover do I need?
    This varies for every person we deal with, the best thing to do is run through the simple planner we have developed.
    You can get started right now by completing the simple enquiry form to the right hand side of this page. We will then come back to you with some additional questions that will help us to establish the amount of cover you need for your personal situation.
  • Who can apply?
    Usually any New Zealand citizen, permanent resident, or people on a 2 year Work Visa can apply.
  • How likely am I to become disabled or pass away before age 65 ?
    Five in 10 males are likely to become disabled due to an illness or
    accident before they turn 65, preventing them from working for at
    least a month.1
    Seven in 10 females are likely to become disabled due to an illness
    or accident before they turn 65, preventing them from working for
    at least a month. Of these, nearly a third will still be on claim 12
    months later.1
    One in nine men will be disabled and off work for more than
    12 months before age 65.2
    One in five women will be disabled and off work for more than12
    months before age 65.2
    Fifty-one per cent of males will suffer a critical illness before the
    age of 70.3
    Thirty-three per cent of females will suffer a critical illness before
    the age of 70.3
    1 Davies Financial and Actuarial Limited
    2 Insurance Alert, Winter 2000
    3 GenRe LifeHealth Australia, 2005
  • What is a buy-sell agreement?
    A buy-sell agreement is a written agreement between you and your business
    partner(s) setting out what each of you intends to do with your business
    interests should one of you leave the business. Essentially, it is a will for
    your business.
    The buy-sell agreement is commonly ‘triggered’ by one or more of the
    following events:
    Traumatic illness
    Retirement or resignation.
    The agreement provides a plan for the future should any of these events occur
    and, just as importantly, outlines how the agreement will be funded – usually
    through insurance or savings. Without the funding mechanisms in place, the
    buy-sell agreement cannot fulfil its purpose.
  • What does accelerated benefit mean?
    This means that when the benefit is paid out, it will reduce another benefit by the same amount (usually your life cover). This is common and helps reduce the overall cost of cover.
  • What is a buy back benefit?
    Usually included with accelerated Trauma, serious illness, critical illness. This benefit allows you to get your Trauma cover reinstated after a period of time, usually 13 months, at the same rates and terms you were originally covered, minus the condition you have claimed for (conditions apply, read your policy wordings).
  • What is a Life buy back benefit?
    A life buy back benefit is usually included when accellerated benefits are attached to a life insurance policy. When these benefits get paid out, the Life cover reduces by the same amount, the buy back benefit allows you to get that life cover back, at the same rates you were paying before you were diagnosed with the cancer or had a heart attack, stroke etc, (conditions apply please read your policy wordings).