FREQUENTLY ASKED QUESTIONS

Shareholder Protection Insurance in New Zealand (also called buy-sell insurance) is a policy that provides funding to buy a shareholder's shares if they die or become permanently disabled. It ensures business ownership passes smoothly to remaining shareholders, protecting Auckland and NZ businesses from financial and operational disruption. If you would like to discuss your situation and/or have us review any existing cover to check it is correct, please contact us.

If your Auckland or New Zealand business has multiple shareholders, an unexpected death or permanent disability can create disputes, cash-flow pressure, or risk losing control of the company. Shareholder protection insurance ensures business continuity, fair payouts, and peace of mind for all owners in Auckland and across New Zealand.

This insurance is essential for: • Companies in Auckland and NZ with two or more shareholders • Family-owned or partnership businesses across New Zealand • Businesses with bank loans, investors, or valuable assets • Professional firms, SMEs, and high-value businesses operating in Auckland

1. Insurance policies are taken out for each shareholder in your Auckland or NZ business. 2. A shareholder agreement sets out procedures if a shareholder dies or becomes permanently disabled. 3. In the event of a trigger, the insurance payout funds the purchase of shares by remaining shareholders. 4. This ensures ownership remains with the intended Auckland or New Zealand owners.

A trigger event in New Zealand typically includes: • Death of a shareholder • Total and Permanent Disability (TPD) • Some policies for Auckland and NZ businesses can include other agreed events, tailored to your shareholder agreement.

Share value can be determined by: • A fixed value at policy start • Formula-based valuation linked to profits, revenue, or book value • Annual reviews to reflect growth in Auckland and NZ businesses Insurance Design works with accountants and lawyers to ensure the valuation aligns with your shareholder agreement.

• Shareholder Protection Insurance: Protects ownership by funding the transfer of shares for Auckland or NZ businesses • Key Person Insurance: Protects business revenue if a key shareholder or employee can no longer contribute Many Auckland businesses benefit from having both policies to safeguard ownership and income.

Yes. Combining life and TPD cover ensures Auckland and New Zealand businesses are protected if a shareholder dies or suffers a permanent disability, maintaining business continuity and fair share transfer.

Strictly speaking, in its simplest form Shareholder cover premiums are not tax deductible and the benefit received from the insurer is not subject to tax. We strongly recommend talking with your accountant to get this right for your particular situation.

Contact Insurance Design for a personalised assessment. We work with leading New Zealand insurers, accountants, and lawyers to structure Shareholder Protection Insurance tailored to your Auckland or NZ business needs, shareholder structure, and succession plan.