“A key person is someone whose continued association with the business provides that business with a significant and direct economic gain”

If that person died or was disabled the future profitability of that business would be directly affected by that person not being there. Key man Insurance pays cash into the business when that Key person is disabled due to illness or injury.

• Ownership Buyout (sales of shares) – Working with your business partners wife or her lawyer might scare you but without a succession plan this can easily happen. This cover will provide the cash sum required to acquire the shareholding of one of the business owners should he/she no longer be able to function or contribute to the business because of serious injury, disability or death.
• Debt Protection Cover – this benefit is to protect and repay the debt to the business. This includes guarantees which is an increased risk to business owners, in that business guarantees would take priority over family’s rights to assets.
• Loss of Revenue Cover – Provides a monthly injection of revenue into the business whilst the key person is unable to work.

ACC does not provide full insurance cover and will only compensate you for loss of income due to injury and it is important to note.

• ACC will only pay 80% of declared income so deductions against your self-employed income to pay less tax can materially affect your pay out when injured,
• ACC claims are taxable where insurance claims are not,
• ACC levies are based on what work you do and in the case of builders can be very expensive. Insurance is about your age and health status so insurance can cost you a whole lot less.
• ACC will not pay you for illness and Insurance will,
• Generally, Insurance pay-outs will far exceed ACC compensation for injury if the injury is permanent.