Key Person Insurance

Having key-person insurance in place can keep your company running during difficult times by providing cash flow. Key man insurance is designed to protect your company from the financial consequences of your most important employees' critical illness, terminal illness, or death.

What is Key Person insurance?

Key person insurance is a type of business insurance that a company can buy and benefit from. It is intended to give the company cash if an owner, a senior executive, or another important person dies or suffers a severe illness critical to the company’s ability to make money.

The impact of a Key Person's illness or death​

Poor health or the passing of a key person will have a significant impact on a small-to-medium enterprise (SME), including:

  • Serious financial consequences
  • Inability to replace specialised knowledge
  • Training, company culture, and “know-how” are all being lost.
  • Loss of credit
  • Competitors profiting from your company’s intellectual property loss
  • Costs associated with attracting and retaining a replacement employee

How does Key person insurance work?

For key person insurance, a business usually buys a life, trauma, or income protection insurance policy on a specific employee, pays the premiums, and is the policy’s beneficiary. The insurance policy benefit is paid to the company as revenue or business income, not capital.

Who is a key person?

A key person is someone whose death, critical illness, or disability would significantly affect the company’s cash flow. In any given business, at least one person (or more) can be regarded as a “key” and should be protected by a keyman insurance policy.

A key individual is often somebody whose abilities, expertise, and/or knowledge significantly increase the company’s income and profitability. That could include:

  • Business owners or business partners
  • Executive leadership team members
  • Top salespeople

What does key person insurance cover?

Key person insurance gives you options and space to deal with unpleasant financial and personal situations in your business.

When something happens to you or your company’s key employees, the effect on the business will be significantly lessened due to the financial cushion provided by adequate key man insurance.

Top Key Person Insurance Providers in New Zealand

We have access to the leading insurance providers in the market, which allows us to recommend the most suitable policies based on your individual circumstances.

Picture of Willi Olsen, founder
Willi Olsen, founder

The Insurance Specialist, Securing People's Income.


The beneficiary of a key person insurance policy is the nominated policy beneficiary, normally the company that pays the insurance premiums.

Because key person insurance protects your company from the financial impact of losing a key employee (including owners/managers) whose death or illness would significantly impact the company’s financial position and livelihood. The insurance proceed are paid to the company and can be used to finance the operational costs, or recruiting for another key staff member.