Business success frequently hinges on the people involved in its running. What would happen to your business if you, a fellow director or a key employee were lost through death or critical illness? The impact could be disastrous, and as these events are often unexpected, there is little time to respond.
Planning for death or unexpected illness might seem morbid but having proper protection in place will safeguard your business's future.
Whatever the size and structure of your business, we can help you prepare for these eventualities by arranging suitable protection. There is no one size fits all approach to business insurance, so we will assess your needs and recommend appropriate cover. With access to the whole of the market, we can source the most suitable and competitive policies for your business.
With many policy options, deciding on an appropriate protection strategy for your business can be challenging. However, with our impartial perspective and expert knowledge, we can help you evaluate the benefits of each and determine the best approach to suit the needs of your business.
The policies available to your business to help mitigate the financial effects of death or critical illness include the following:
If your business has multiple shareholders, then shareholder protection is normally highly recommended.
If one of your shareholders dies, their share of the business will pass to their estate and this could lead to people not previously involved in the business entering and potentially taking control. To retain control, the remaining shareholders would need to buy back the deceased owner's shares, although they might not have the funds to do so.
Taking out shareholder protection insurance will protect against this scenario by paying out a lump sum in the event a shareholder dies. The pay-out will provide the funds to buy the deceased's share of the business and retain control. It can also help ensure that the deceased shareholder's beneficiaries receive a fair value for their shares.
Relevant life insurance is a cost-effective and tax-efficient way to provide life insurance for you and other key people in your business.
Upon the insured person's death, the policy will pay out a lump sum to their family or financial dependents. It can also provide a pay-out following the diagnosis of a terminal illness.
Since your business pays the premiums and owns the relevant life cover, the expense can be offset against corporation tax and as HMRC does not consider it a benefit-in-kind, you and your employees will not have to pay any National Insurance on the premiums.
With tax benefits to the employer and employee, relevant life insurance is a sensible choice to enhance your employee benefits and provide benefits to you as a director.
Key person insurance protects your business from the financial impact of losing a director or key staff member through death or critical illness.
A key person is anyone crucial to the day-to-day running of your company, such as a director, employee, or anyone whose skill, knowledge and experience impact revenue. If a specified key person dies or has a terminal or critical illness, the policy will pay a tax-free lump sum to your business.
The policy proceeds could help soften the financial impact of losing a key member of staff, so this type of insurance is worth considering. We can assist you in evaluating the benefits of a key person insurance policy and find one to suit the needs of your business.
For help assessing and arranging appropriate protection for your business, please get in touch for an initial chat with one of our financial advisers.
The information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.
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