Business Protection, Keyman and Shareholder
or Partnership Insurance Contracts
What is business protection?
Business protection could help client owned businesses continue to trade should a key person or business owner die or become terminally or critically* ill. Proceeds from the policy could help ensure that key individuals are replaced, corporate debt is protected and shares from the deceased partner’s/director’s estate are purchased.
Many believe arranging business protection to be a lengthy and complicated process. But actually, the principles are similar to any other type of protection. *If critical illness cover is chosen as an additional option.
Relevant Life Insurance
A Relevant Life Plan is a term assurance plan available to employers to provide an individual death in service benefit for an employee. It is designed to pay a lump sum if the employee dies whilst employed during the length of the policy. It will also payout if the employee, whilst employed, is diagnosed with a terminal illness as long as the definitions are met. A Relevant Life Plan is paid for by the employer.
This is a life assurance policy taken out by a company covering an employee’s sudden absence from the business due to death or illness.
By having Keyman Insurance in place the company could survive the financial loss of a key individual. The money from the policy could be used to provide compensation for the loss in profits as a result of the keymans’ death or illness. This would allow the company time to train another employee to take over or recruit a new suitably qualified applicant.
Shareholder & Partnership
If a shareholding Director or Partner were to die or suffer an illness, the implications for your business could be very serious indeed. Not only would you lose their experience and expertise but consider too what might happen to their shares.
A written legal agreement gives the other Directors or Partners the right to buy the shares and gives the person to whom the shares have been passed, the right to sell those shares to the remaining Directors or Partners.
To protect against these eventualities happening, each Director or Partner should take out a life insurance policy to cover a
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