If you run a small business, you probably realise how important you are within that business. Without you around, do things tend to grind to a halt? Think about when you last took a holiday and what actually got done while you were away? It was probably just the very bare minimum.

Keeping your business running.

So what if you were to become sick and unable to work? Would your partner step in and run things for you? And if so, then who would be around to care for you and your kids? As the owner of a small business, hopefully you also accept you cannot do it all. There are times when you need help. Key Person Insurance means you can keep your business running and ensure that revenue keeps coming in.

This is where Key Person Insurance can be a real help. Designed to come into action when a key person in your business becomes incapacitated and unable to work, Key Person Insurance provides funds to the business so that it can employ a person to cover for that key person in your business. 

Of course, the Key Person doesn’t have to be the business owner. It can be anyone that you feel would be a real loss for the business if they were not around. Perhaps you run a manufacturing business? Then your production manager might be deemed a key person. 

Better than Income Protection?

For many business owners, Key Person Insurance is a better solution to Income Protection Insurance, and here’s why.

It is an agreed value insurance policy and therefore does not have an offset clause against ACC. This means you can still claim Key Person Insurance even if you are being treated under ACC. This is NOT the case with Income Protection.

Key Person Insurance pays an agreed value and, unlike Income Protection Insurance, does not require proof of income. This is good news for the business owner who for various reasons might be disclosing only a small earning from the business.

Deciding on a value.

It is important to assess the value you need for Key Person Insurance. ACC provides data on the replacement cost of many types of professional. Be sure to have ample cover, because if you need to claim on this, you’ll want to know you’re well covered for a long period of time. Or you can talk to us a FDG who have years of experience in the insurance field and can give you some advice on products and values. To contact on of our team please email us at info@fdg.co.nz