Why Do I Need Life Insurance For My Business?

How life insurance can help business owners plan for the unexpected

Life insurance is often considered a very personal matter, but it matters in the business arena too. For business owners, particularly those working with partners who also have vested interest in the company, life insurance and other related covers like key person insurance and debt protection are crucial.

Comprehensive and relevant life insurance will also allow you to protect your family financially should something happen to you that will affect the running of your business. Take a look at the following points to discover what the right insurance policies can do for you as a business owner.

Your business partner will be protected

Business partners will often take out life insurance policies on each other. Often, the money in conjunction with a written agreement will ensure that the surviving partner can buy out the other’s shares and keep going. Being in business together makes people financially interdependent—it’s a good idea to carefully plan for the possibility of one partner dying unexpectedly.

A robust policy is a safeguard for your business partner and any employees relying on your company for their income. It will protect the livelihood of those who have helped you build your business.

Your family will get by

If your family depends on the income generated from your business, you will want it to continue running effectively in any circumstance. Having policies in place to facilitate this will ensure they can be taken care of—and if they sell your share in the business, they can get the best price possible.

Debt protection cover is also very important in protecting your family and loved ones in the case of your death, incapacity, or disablement. It ensures that debt can be repaid, removing personal liability from you and your estate.

You can guard against the loss of key people

Key person insurance is a helpful product that makes sure your business can run when particular people are out of action. Most companies—particularly small businesses—have those individuals who are crucial to operations. Would it be bad news for the future of your company if you, a partner, or an experienced employee were to suddenly become unable to perform their responsibilities? If the answer to that is yes, you may need to consider key person insurance.

Working with an insurance broker is the best and easiest way to secure the right insurance for your specific circumstances and needs. Working independently from insurance companies, they are the experts in finding policies that fit an individual, saving clients time and often cutting overall costs by helping them to determine which insurances are necessary and most beneficial through careful risk analysis.

The Runacres Insurance team are experienced in business-related insurance. Get a quote or give us a call to discuss how we can help you prepare.


Do I Need Life Insurance? Probably—Here’s Why

Why buy life insurance?

To think about your own death is generally considered a little morbid; it’s a subject that many people—especially young and healthy ones—prefer to avoid. However, planning for all eventualities is important. Life insurance is a key component of good financial management. Even the healthiest of people can run into unexpected circumstances: imagine a man in his forties who eats a plant-based diet and runs every day being handed a cancer diagnosis or being hit by a truck on a pedestrian crossing. It can happen, and it does.

The right life insurance allows things to run smoothly for your loved ones should you pass away. There are many options out there being sold to Kiwis, but each situation is unique: different risks, different goals, and different levels of coverage desired. For this reason, an experienced insurance broker is a huge asset.

Here’s how life insurance and related insurances can help you plan for all possibilities:

Your dependents will be looked after

Number one on the list of people to consider when planning for an unexpected death are children or other dependents—those who rely on you to provide for them. Most parents and caregivers are motivated to ensure that those in their care are well looked after when they pass on. Life insurance allows you to rest assured that dependents will have enough to live comfortably, and depending on the policy can even set them up very well for future large expenses like tertiary education.

For a lot of clients, making sure their kids will be financially secure with or without them is a primary reason for purchasing life insurance. However, it’s not the only one; this type of cover is also important for those without dependents to consider.

Your spouse will have time to adjust

Losing a husband or wife is traumatic, devastating, and disruptive. Doing it while faced with financial worries due to the loss of their income adds another layer of difficulty to the loss.
Life insurance offers a buffer for the surviving spouse, replacing the income of their deceased partner to reduce financial pressure at a vulnerable time. With the right policy to take up some of your financial responsibility for a while, your spouse or significant other will have time to get used to their new situation without having to worry about living costs.

Your debts will be paid

Losing income is one thing; being saddled with sole responsibility for a large debt is another. Life insurance can pay off shared debts—often this means a mortgage—to reduce living costs for those left behind and take away a financial burden. Paying off any debts for which they are jointly responsible is a fantastic gift that you can leave your loved ones.

Your final expenses will not cost your loved ones

Dying can be a pricey business. Funerals tend to run too many thousands of dollars depending on the type of celebration you or your family would like to hold. Coffins are expensive, burial is expensive, and so are the details like catering and flowers. Although New Zealand has long since done away with “death duties”, there are also things like probate and estate administration costs to think about. A friend or family member’s death is difficult enough to get through without the burden of paying for a funeral and other end-of-life expenses!

Runacres Insurance is a team of New Zealand-based insurance brokers who are dedicated to finding the best cover for Kiwis. Backed by NZBrokers, we offer quality advice and guidance to anyone seeking insurance—from life insurance and other personal covers to business insurance in specialist industries. Proud recipients of many industry awards and supporters of local sports teams and creative organisations, the Runacres team are locals who support other locals. And we pride ourselves on providing a personalised and highly customised insurance and risk service. Let us help you find peace of mind.