Owner Life & Disability Insurance NZ
Protect yourself, your family, and your business if you die or become disabled. Comprehensive personal protection for business owners. From $150/month.
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:
67% of NZ business owners have inadequate personal insurance, often prioritizing business insurance over family protection. Yet business owners face higher risks—irregular income, business debts guaranteed personally, and no employer safety net. A 45-year-old business owner has a 30% chance of being off work for 3+ months before age 65 due to illness or injury.
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.
Owner Insurance Costs in New Zealand
Premiums vary by age, health, smoking status, occupation risk, and coverage amount. Here are typical monthly costs for a healthy 40-year-old non-smoking business owner:
| Coverage Type | Coverage Amount | Monthly Premium |
|---|---|---|
| Life Insurance | $500,000 | $45 - $75 |
| Life Insurance | $1,000,000 | $80 - $135 |
| Income Protection (to age 65) | $5,000/month | $150 - $250 |
| TPD (Total & Permanent Disability) | $500,000 | $40 - $70 |
| Trauma Insurance | $100,000 | $65 - $110 |
| Business Expense Cover | $8,000/month | $80 - $140 |
Example Protection Packages
Typical comprehensive packages for business owners at different stages:
- • Startup Owner (Age 35): Life $500k + Income Protection $4k/month = $150-220/month
- • Established Owner (Age 45): Life $1M + Income Protection $6k/month + Trauma $100k = $350-480/month
- • Senior Owner (Age 55): Life $750k + TPD $500k + Business Expense $8k/month = $450-650/month
Remember: Premiums increase with age. Locking in cover early saves money long-term and ensures insurability before health issues arise.
Top Life & Disability Insurance Providers in NZ
Compare quotes from these leading New Zealand life and disability insurers:
AIA
Largest life insurer in NZ with comprehensive personal protection products. Strong income protection and trauma cover. Vitality wellness program rewards healthy living.
Best for: Comprehensive cover, wellness focus, established owners
Partners Life
Innovative life insurer with competitive pricing and modern application process. Excellent trauma insurance definitions. Strong reputation for claims support.
Best for: Competitive pricing, modern process, trauma insurance
Fidelity Life
NZ-owned insurer with strong focus on customer service. Competitive pricing for younger business owners. Flexible product structures and add-on options.
Best for: NZ-owned preference, younger owners, flexible options
AMP
Established provider with comprehensive life and disability products. Strong income protection with flexible benefit periods. Good for higher cover amounts.
Best for: High cover amounts, income protection, established businesses
Sovereign
Specialist life insurance provider with strong business owner focus. Excellent business expense cover and flexible TPD definitions. Competitive for high-risk occupations.
Best for: Business expense cover, high-risk occupations, business focus
Asteron Life
Part of Suncorp Group with strong product range. Competitive life and TPD premiums. Good for package deals combining multiple cover types.
Best for: Package deals, life + TPD combinations, competitive pricing
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: $5k-$15k/month 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. It's tax-deductible and relatively affordable ($80-$140/month). 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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Compare quotes from top NZ insurers. Protect yourself and your family. From $150/month.
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Protect What You've Built
Comprehensive life and disability insurance for business owners. Protect your family, repay debts, ensure business continuity. From $150/month.
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