Business protection: buy-sell and business expenses cover

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By Tony Smilevski · Updated 11 October 2026

Key points

• Acenda's PDS describes an ownership (buy/sell) agreement as one where your share of the business is purchased by any remaining partners when certain events occur, for example death, total and permanent disability or critical illness.[1]
• MetLife's PDS says a policy outside super may be self-owned, jointly owned (up to five individuals, not available with Income Cover), owned by another individual or owned by a corporate entity, and that tax treatment "may vary" with ownership.[2]
• Zurich's TMD doesn't include death or TPD cover held in super in its target market for businesses, which covers business succession.[3][4]
• AIA's business expenses cover, while you are totally disabled, pays the lesser of the insured monthly benefit and the expenses actually incurred, less amounts reimbursed elsewhere, and AIA lists it as outside super only; ClearView and PPS Mutual say it isn't available inside super.[5][6][7][8]
• OnePath's PDS says premiums paid for the purposes of carrying on a business, such as Business Expense Cover, are generally tax deductible and benefits under such cover generally assessable as income, but where a policy is held by an employer or for business insurance purposes the taxation implications are complex and depend on the circumstances of the business or employer.[9]

Business protection insurance is life insurance a business or its owners hold to protect the business. This guide covers buy-sell cover, which helps fund the purchase of an owner's share after death, disability or serious illness, and business expenses cover, which helps pay fixed business costs while an owner can't work.

What is business protection insurance?

It takes several forms. OnePath's product disclosure statement (PDS) lists business insurance purposes including key person insurance, loan guarantee insurance and insurance supporting a written business succession agreement. Business expenses cover is another. OnePath's PDS calls someone a key person if "they are crucial to the business operations and the business would suffer financial loss if the life insured died or became disabled", which "must be able to be reasonably demonstrated".[10] See our key person insurance guide.

This page covers life-insurance-based cover only, not general business insurance. That's not Tony's area of expertise, but our team can help: we can put you in touch with a trusted partner who specialises in it.

How does buy-sell (business succession) insurance work?

Acenda's PDS describes an ownership (buy/sell) agreement as one "where your share of the business is purchased by any remaining partners when certain events occur (for example your death, total and permanent disability or critical illness)".[1] Insurance on each owner can help fund that purchase. Who receives a payout depends on who owns each policy (see below). A solicitor prepares the buy/sell agreement. We don't prepare legal agreements. See our life insurance, TPD and trauma guides.

OnePath's PDS has an extra-cost Business Guarantee Option (if shown on the policy schedule). For cover taken out for a business insurance purpose OnePath approved, it lets the policy owner apply to increase cover without medical evidence when the value tied to that purpose rises, if all its conditions are met. For buy/sell, share purchase or business succession purposes, it asks for a current valuation from a qualified accountant or business valuer.[11]

Who owns the policies in a buy-sell arrangement?

MetLife's PDS says a policy outside super may be self-owned, jointly owned, owned by another individual or owned by a corporate entity.[2] TAL's PDS lists these ownership options for Life Insurance generally: individual, superannuation (TAL's own super product, an eligible retail super fund or an SMSF), trust, company/business and joint ownership.[12] Zurich's target market determination (TMD, which says who a product is designed for) doesn't include death or total and permanent disability (TPD) cover held in super in its target market for businesses, which covers business succession.[3][4]

MetLife's PDS also says benefits are paid to the policy owner or owners (or to nominated beneficiaries), and that tax treatment "may vary" with ownership.[2]

What is business succession planning, and how do I create a plan?

The plan is for the owners to make with their accountant and solicitor. It sets who takes over, what the business is worth and how a departing owner or their family is paid.

What is business expenses insurance?

It pays a monthly benefit toward a business's fixed costs while the owner can't work because of sickness or injury. AIA pays the lesser of the insured monthly benefit and the expenses actually incurred, less amounts reimbursed elsewhere.[5] AIA lists it as outside super only.[6] ClearView and PPS Mutual say it isn't available inside super.[7][8]

Which business expenses are covered, and which are not?

The lists differ by insurer, so read the PDS. Examples:

• AIA: regular normal operating expenses, including accounting and audit fees, "rent, property rates and taxes", utilities and a locum's net cost.[5] Not covered: salaries and related costs for you and for income-generating employees (other than a locum); relatives' pay unless employed for at least 60 consecutive days before disablement; your commissions or bonuses; loan principal repayments; capital costs; depreciation on real estate; investment losses; "taxes, other than in respect of related costs for non-income-generating employees"; any payment that isn't a regular operating expense.[13]
• Zurich Wealth Protection: normal day-to-day expenses, including accounting and audit fees, rent and utilities. Not covered: your personal pay or drawings; cost of goods or merchandise; capital repayments on a loan or mortgage (except repayments directly related to identifiable business assets, no more than the minimum required, and in place for at least six consecutive months before disability); costs of implements of profession; premiums on this policy; pay of employees directly generating income; depreciation; pay of immediate family members unless employed more than 30 days before disability.[14]
• ClearView: fixed expenses, including rent and regular principal and interest repayments on business loans or mortgages (unless the premises is also your principal residence). Excluded: your personal salary, fees or drawings; pay of family or related parties (unless employed at least 90 days before you became disabled) and of non-employees; pay of income-generating employees; cost of goods, fittings, equipment, implements or products; depreciation; premiums for this cover.[15]

What are the waiting and benefit periods?

They vary by insurer. Examples:

• AIA: waiting periods of 14 or 30 days (occupation categories A1, A2, M, A3, A4, B1, B2, C1, C2), 30 days (D), not available (E). Benefit period: 12 months from the end of the waiting period, up to 12 times the insured monthly benefit. If less than that has been paid and you're still totally disabled, payments can continue until it is reached, for up to a further 12 months (other end events apply).[13]
• Zurich: 30, 60 or 90 days. Benefit period: 1 year, which Zurich describes as 12 times the insured monthly benefit paid over up to 24 months (ends at 65, or 60 for special-risk occupations).[16][17]
• ClearView: 30, 60 or 90 days, though not all are available for all occupation categories. Benefit period: one year.[7]
• PPS Mutual: 30 days or 90 days. Benefit period: 1 year, extended until the total paid is 12 times the monthly benefit if you still meet the definition.[18]
• Acenda: 14 or 30 days.[19] Reimbursement is for up to 12 months. If less than the full benefit is paid over a year, the benefit period is extended while you remain disabled, for the lesser of another 12 months or until the full 12 months' benefit is reimbursed.[20]

How the insurers compare

Business expenses cover: waiting and benefit periods (examples from each PDS; they vary by insurer):

• Insurer: AIA — Waiting period: 14 or 30 days (categories A1, A2, M, A3, A4, B1, B2, C1, C2); 30 days (D); not available (E).[13]; Benefit period and limits: 12 months from the end of the waiting period, up to 12 times the insured monthly benefit; if you are still totally disabled and less than that was paid, it can extend by up to a further 12 months (other end events apply).[13]
• Insurer: Zurich — Waiting period: 30, 60 or 90 days.[16][17]; Benefit period and limits: 1 year: 12 times the insured monthly benefit, paid over up to 24 months (ends at 65, or 60 for special-risk occupations).[16][17]
• Insurer: ClearView — Waiting period: 30, 60 or 90 days; not all are available for all occupation categories.[7]; Benefit period and limits: One year.[7]
• Insurer: PPS Mutual — Waiting period: 30 days or 90 days.[18]; Benefit period and limits: 1 year, extended until the total paid is 12 times the monthly benefit if you still meet the definition.[18]
• Insurer: Acenda — Waiting period: 14 or 30 days.[19]; Benefit period and limits: Up to the monthly benefit while totally disabled, for up to 12 months; extended while disabled until 12 months' benefit is reimbursed, by at most a further 12 months.[20]

Who is business expenses insurance for?

• Zurich's TMD: small business owners, including sole traders and partnerships, working at least 20 hours a week in their principal occupation.[21]
• PPS Mutual's TMD: a self-employed person, working director or partner who is, or has been, eligible to practise (or holds a minimum tertiary qualification) in a professional field PPS Mutual recognises, and is gainfully employed and working at least 20 hours a week.[22]
• ClearView's TMD: people who are self-employed or run a small business.[23] Its PDS limits this to businesses with no more than five staff, including yourself and other owners, and requires you to work a minimum of 20 hours a week in your principal occupation.[7]
• AIA's PDS: self-employed sole traders, partners and working directors in Full-time Employment. Occupation Category E and Home Duties are not eligible.[6]

How is business expenses insurance different from income protection?

Business expenses cover reimburses a business's fixed costs. Income protection pays a benefit based on income (see our income protection guide). AIA's PDS sets a maximum on the combined monthly benefits for income protection and Business Expenses,[24] and reduces the Business Expenses benefit by your portion of the business's net income from trading.[13]

Is business protection insurance tax deductible?

OnePath's PDS says premiums paid "for the purposes of carrying on a business such as Business Expense Cover are generally tax deductible" and that benefits "will generally be assessable as income". For business insurance purposes, it says "the taxation implications are complex and depend upon the circumstances of the business or employer".[9]

The ATO's ruling IT 155 on key man insurance, dated 28 June 1968, says that when deductions for premiums are considered, "it will be necessary … to make special efforts to determine the purpose for which the insurance was taken out". As an example where premiums on accident or term policies "would not be deductible" and "the proceeds would not represent income", it gives insurance "taken out by one partner in respect of another for the purpose of providing in the event of the other partner's death by accident, funds to buy out his estate's interest in the partnership".[25]

How this applies depends on your circumstances. A registered tax agent or accountant can say how it applies to you. See also our tax deductibility guide.

Questions to ask before you choose

• Which events does the cover respond to, and is it inside or outside super?
• Who owns each policy, who receives the payout, and does that match the buy/sell agreement?
• Which expenses count, and which waiting and benefit periods apply to my occupation category?

Read the insurer's PDS and TMD before deciding. You can find them in our PDS and TMD library. We deal with 11 Australian life insurers. For general information about anything in this guide, book a time with Tony or call 0433 22 77 11.

Sources

• [1] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 67.
• [2] MetLife Protect and Combined PDS / Policy Terms (Nov 2025), PDF page 25.
• [3] Zurich TMD (Nov 2025), PDF page 2.
• [4] Zurich TMD (Nov 2025), PDF page 9.
• [5] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 118.
• [6] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 115.
• [7] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 21.
• [8] PPS Mutual Professionals Choice PDS (Dec 2024), PDF page 60.
• [9] OnePath OneCare PDS (Mar 2026), PDF page 117.
• [10] OnePath OneCare PDS (Mar 2026), PDF page 62.
• [11] OnePath OneCare PDS (Mar 2026), PDF pages 61–62.
• [12] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 7.
• [13] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 120.
• [14] Zurich Wealth Protection PDS and policy conditions (Nov 2025), PDF page 51.
• [15] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 82.
• [16] Zurich Wealth Protection PDS and policy conditions (Nov 2025), PDF page 53.
• [17] Zurich Wealth Protection PDS and policy conditions (Nov 2025), PDF page 54.
• [18] PPS Mutual Professionals Choice PDS (Dec 2024), PDF page 62.
• [19] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 44.
• [20] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 89.
• [21] Zurich TMD (Nov 2025), PDF page 44.
• [22] PPS TMD Business-Expenses (Sep 2026), PDF page 2.
• [23] ClearView TMD (Apr 2026), PDF page 10.
• [24] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 116.
• [25] Australian Taxation Office, Taxation Ruling IT 155: Key man insurance (retrieved 30 September 2026).

Just so you know, Tony Insurance operates under Sustainable Life Solutions (AFSL 536966) and can only give general advice about life insurance. That means we'll tell you what you need to know for you to make a good decision, but we can't give you specific advice or recommendations. It also means that everything on our website is only general information and isn't specific to you.

Toni Smilevski, Authorised Representative 343156 of Sustainable Life Solutions Pty Ltd (AFSL 536966)