The debts don’t stop.
A payout can help the business stay afloat.
Smart businesses know that if a key person such as a business owner, loan guarantor or shareholder dies, the business might not struggle given all the expenses and planning required to keep it going. Life insurance for business pays a lump sum to help cover a range of costs from repaying business loans to business continuity.
If the insured person dies, your business receives the funds which provide security for a wide range of financial commitments.
Being in business carries certain responsibilities. Life insurance ensures that if an insured person within the business dies, the funds are there to repay business debts or allow other shareholders to buy out a share of the business.
You pay an amount of money (called a ‘premium’) for a policy. The policy is a contract so you know exactly what we’ll pay out for. As long as you keep paying for your insurance with us, and the policy terms have been met, we’ll pay out for everything we agreed.
With business growth comes increased risk. You can increase the value of a person’s cover when certain financial changes happen in the business before the age of 55 without needing to give us medical evidence (check out the Life insurance info sheet for details as there are a few conditions). While medical evidence isn’t needed, we will need to see financial evidence to support the need for the increase in cover. (You can increase your cover at any time up to age 75 though, but we may need to do health and financial checks.)
We’ve compiled a list of the most commonly asked questions about this cover.
For a good overview of the ins and outs, it’s worth reading the factsheet.
Yes - you’ll need to be between 16 and 75 if you want to take out this cover.
We recommend talking to your adviser.
You can pay fortnightly, monthly or annually – whatever works best with your budget.
At the start of the policy you can choose whether you want your premiums to increase each year (called Yearly Renewable Term) or be fixed for the duration of your policy (called Level Term).
With Level Term, the premiums start out a bit higher than yearly renewable, BUT the amount you pay remains the same for the term of the policy.
With Yearly Renewable Term, your premium increases each year based on things like your age, gender and smoker status. You’ll receive a note letting you know your adjusted premium.
A combination of Level Term and Yearly Renewable Term can help provide flexibility and certainty.
Ask your adviser about this, or give us a call on 0800 88 22 88.
If an insured person in your business is diagnosed with a terminal illness and given less than year to live, you can apply to access the full amount they’re insured for early. And in some other cases, you might able to apply to have 30% of the full amount (up to $250,000) paid even earlier. The info sheet will explain this in more detail.
There are certain events where Life insurance can be increased without the need for more medical evidence up until when the insured person reaches 55. With Life insurance for business there’s a benefit automatically offered under your policy which allows you to increase up to certain limits should the person’s value to the business, their financial interest in the business, or loan guarantee increases. If you’re likely to need more cover in the future than what this benefit offers, you can also take out the business future insurability option. The info sheet will explain these in more detail.
* Fidelity Life has an A- (Excellent) financial strength rating from A.M. Best. The rating scale that this rating forms part of is available for inspection at our offices. For more information please visit fidelitylife.co.nz/about-us/our-financial-strength/
Disclaimer – the information contained in this webpage is a convenient summary of the key points of this insurance policy and is general in nature. It is not, and is not intended to be, a policy document.
Details of definitions, benefits, standard exclusions/limitations, terms and conditions are contained in the full policy documentation which is available from your financial adviser. Please refer to current policy wordings for specific details. This webpage does not provide a personalised financial advice service.