Union head Matt McCarten wants to sell his life insurance policy to help pay $153,000 in unpaid taxes and bills, saying he does not want to "die with debt".
Mr McCarten has terminal cancer. His company, Unite Support Services, was put into liquidation last year with unpaid bills totalling $152,801 to creditors, including at least $100,000 to Inland Revenue.
Mr McCarten said his insurance policy was worth about $230,000 and he had learned only recently that it could be sold off for somebody else to collect on after he died - giving him money in the hand.
"I didn't know people did that. So I said I must be a prime candidate."
The National Business Review reported yesterday that Mr McCarten was considering selling his life insurance policy. The paper learned of its existence in the most recent insolvency report.
Mr McCarten said he was doing other work to pay off the debt, but it would take time.
Last September, he was told the cancer had spread to his liver and he had a 0.8 per cent chance of survival.
He was given between six weeks and six months to live.
"So if someone wants to buy my life insurance, great. It's a good investment because my percentages aren't great. And I don't want to die with debt, and certainly not to the taxpayer."
Mr McCarten said he had taken out the policy when he first set up the business, before he was diagnosed with cancer. The main beneficiary was the Unite Union.
After doctors gave him only up to six months to live, he said he had known the insurance policy would cover the debts. "But I haven't died yet, against all conventional wisdom.
"It's black humour, of course, but if I had died, it would be fine. The debts would be paid. There's something very surreal about it."
Investment Savings and Insurance Association chief executive Peter Neilson said selling life insurance in such a way was possible, although it was not common. It could happen both in cases of receivership or terminal illness.
The policy would be onsold and the buyer would collect after the person named in the policy died.
"It's a bit macabre in one sense but basically it is a way of helping people who are in a difficult position," Mr Neilson said.
Most insurance companies would pay out money in advance in cases of terminal illness, he said, although that depended on the policy.
Mr McCarten said there was provision for his insurance company to pay out early in cases of terminal illness but his cancer had not yet reached stage four, which would trigger that.
He said that when he was first diagnosed with cancer in 2010, he had kept on staff and allowed the bills to rise during his treatment, believing he would return to the business to make up lost ground.
However, the cancer had spread, making that impossible.
Alastair Stewart, spokesman for the Insolvency and Trustee Service, said that although the company had paid the premiums on the life insurance, the policy was in Mr McCarten's name so was not a company asset.
He said that the liquidator was currently investigating whether Mr McCarten now owed money to the company for the cost of thepremiums.By Claire Trevett @CTrevettNZH Email Claire