Owner Life & Disability Insurance NZ
Protect yourself, your family, and your business if you die or become disabled. Comprehensive personal protection for business owners.
What is Owner Life & Disability Insurance?
Owner life and disability insurance provides personal financial protection for business owners and their families. As a business owner, you face unique risks—your income depends on your ability to work, your business may rely on your expertise, and your family's financial security is tied to your business success.
This insurance ensures that if you die or become unable to work due to illness or injury, your family is protected financially, business debts can be repaid, and your life's work provides lasting security for your loved ones.
Why Business Owners Are Underinsured:
Many business owners under-insure on the personal side, often prioritising business cover over family protection. Yet business owners typically carry irregular income, personal guarantees on business debts, and no employer safety net — risks that personal protection cover (life, TPD, income protection, trauma) is designed to address.
Types of Owner Insurance Coverage
Life Insurance
Lump sum payment to family if you die. Repays business debts, clears mortgage, replaces income, funds children's education. Typical coverage: $500k-$2 million depending on debts and family needs.
Best for: Protecting family income, repaying business loans, clearing mortgage
Income Protection
Replaces 75% of income if you can't work due to illness/injury. Payments continue monthly until you recover, retire, or benefit period ends (typically 2-5 years or to age 65). Essential for maintaining lifestyle and business costs.
Best for: Replacing lost income, paying ongoing business expenses, maintaining mortgage
Total & Permanent Disability (TPD)
Lump sum if permanently unable to work in your occupation. Covers permanent disabilities from accident or illness. Provides capital to restructure life, retrain, or retire early. Typical coverage: $500k-$1.5 million.
Best for: Permanent disability protection, life restructuring, debt repayment
Trauma / Critical Illness
Lump sum on diagnosis of serious illness like heart attack, stroke, cancer. Provides immediate financial relief during recovery. Covers medical costs, mortgage, living expenses while unable to work. Covers 35-40 conditions.
Best for: Critical illness diagnosis, immediate financial relief, treatment costs
Business Expense Cover
Covers ongoing business expenses if you can't work—rent, utilities, staff wages, loan repayments. Typically pays for 12-24 months. Keeps business running while you recover or allows orderly wind-down.
Best for: Maintaining business operations, protecting business value, covering fixed costs
Mortgage Protection
Specialized life or income protection specifically for mortgage repayments. Can be decreasing term (matches reducing mortgage balance) or level cover. Essential if business income funds personal mortgage.
Best for: Mortgage security, protecting family home, debt repayment
Why Business Owners Need Personal Insurance
Business owners face unique financial risks that make personal insurance even more critical than for employees:
No Employer Safety Net
Employees have sick leave, ACC, and job protection. Business owners have none of these. If you can't work, business income stops immediately while expenses continue.
Personal Guarantees on Debts
Business loans, leases, and supplier credit often require personal guarantees. If your business fails due to your death or disability, you're personally liable for these debts.
Business Value Depends on You
Many businesses lose 50-90% of value if the owner can't work. Your family may be unable to sell the business or get fair value without your involvement.
Irregular Income
Business income fluctuates. Paying yourself less to reinvest in business means lower ACC and less emergency savings. Insurance provides stability when income stops.
Multiple Dependents
Your income supports family and potentially employees. Insurance ensures everyone depending on you has protection if you can't work.
Tax Advantages
Some owner insurance premiums (particularly business expense cover) are tax-deductible. You can structure cover for maximum tax efficiency with proper advice.
What Affects Your Premium
Personal protection cover is individually underwritten. The factors below all influence what an insurer will quote.
Age and health
Premiums step up with age and depend on medical history, smoking status, and current health.
Occupation
Office-based work, manual trades, and high-risk occupations are rated differently.
Sum insured
$500k vs $1m life cover, $4k vs $8k monthly income protection — the cap drives the premium.
Cover type
Life, TPD, trauma, income protection and business expense cover each carry their own pricing logic.
Wait period and term
Income protection wait periods (4, 13, 26 weeks) and benefit term (2yr, 5yr, to-65) materially change cost.
Underwriting outcome
Loadings, exclusions or standard terms after the insurer reviews medical and financial information.
Personal life, TPD and income protection cover sit outside the FCIB commercial-lines panel. We can refer you to a registered life and health adviser for a tailored recommendation.
Personal Life & Disability Cover
Personal life, TPD and income protection cover sit outside the FCIB commercial-lines panel.
First Commercial Insurance Brokers Ltd (FSP748591) places business-side commercial cover. We do not arrange personal life or health cover directly. If you would like a personal-protection quote, we can refer you to a registered life and health adviser who will assess your situation and arrange suitable cover.
Frequently Asked Questions
Should I pay premiums personally or through my business?
It depends on your tax situation and policy type. Personal payment: You pay from after-tax income, but claims are tax-free (important for life insurance and trauma). Business payment: Premiums are tax-deductible, but some benefits may be taxable. Business expense cover should be paid by business. Life and trauma typically better paid personally. Income protection can be either. Consult your accountant for optimal structure based on your circumstances.
How much life insurance do business owners need?
Calculate based on: (1) Business debts: Total of business loans, supplier credit, lease obligations with personal guarantees; (2) Mortgage and personal debts: Outstanding home mortgage, credit cards, personal loans; (3) Income replacement: 5-10x your annual income to replace lost earnings; (4) Future needs: Children's education, spouse's retirement. Typical range: $500k-$2 million. A 45-year-old owner with $800k mortgage, $400k business debts, and young children typically needs $1.5-2 million cover.
What's the difference between income protection and ACC?
ACC only covers accidents—slips, falls, car crashes. It does NOT cover illness (heart attack, cancer, mental health). Income protection covers BOTH accidents AND illness. ACC pays 80% of income up to a maximum (~$130k/year), whereas income protection covers 75% with no cap (you choose the amount). ACC has 1-week wait period; income protection typically 4-13 weeks. For business owners, illness causes 70% of income loss claims—ACC alone is insufficient protection.
Can I get insurance if I have pre-existing health conditions?
Yes, but with potential limitations. Insurers may: (1) Exclude specific conditions (e.g., back problems excluded from income protection); (2) Apply premium loading (charge extra, typically 25-100%); (3) Accept with standard terms if condition is well-managed. Disclosure is mandatory—non-disclosure voids coverage. Even with exclusions, getting cover for other conditions is valuable. Apply early before conditions worsen. Different insurers have different underwriting approaches—broker advice helps find best outcome.
What is business expense cover and do I need it?
Business expense cover pays fixed business costs if you can't work—rent, staff wages, utilities, loan repayments, insurance premiums. Typical benefits run for 12-24 months. You need it if: Business has significant fixed costs; You have staff depending on business continuing; You want option to return to business after recovery; You have business loans requiring ongoing repayment. The premium often qualifies as tax-deductible. Particularly valuable for professional practices, retail businesses, and businesses with leased premises.
Should I get insurance through an adviser or direct?
Advisers (brokers) typically provide better outcomes for business owners. They compare multiple insurers, understand complex business owner needs, structure cover tax-efficiently, assist with claims (critical when you're stressed), and advocate if insurer declines claim. Direct insurance is cheaper upfront but has limitations—single insurer, generic cover, no claims support. For business owners with debts, employees, and complex needs, adviser value far exceeds cost. Most advisers are paid by insurers (commission), so no direct cost to you.
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