In Business, we also need to take out protection against the unexpected illness or even death of business partners, shareholders and other key people.
If one of your key people were to be absent from work permanently or for a prolonged period would profits fall? Would you lose control of your business? What would be the cost of replacing one of your key people?
The chance of one partner in a 2 or 3 man business dying or becoming seriously ill before retirement are probably a lot higher than you might think.
The odds of one dying or becoming seriously ill before 65:
| Age | Sole Trader | 2 Partners | 3 Partners |
| 35 | 24% | 43% | 56% |
| 40 | 23% | 42% | 55% |
| 45 | 22% | 39% | 53% |
| 50 | 20% | 36% | 49% |
Source: Critical Illness tables published by Society of Actuaries (Ire) April 2000
Many problems can arise for a business when a partner or key employee is no longer in the picture either due to serious illness or death. With adequate financial planning some of these problems could be alleviated. Arranging Business Protection Cover is the only way to ensure that the necessary funds will end up in the correct hands at the correct time and in a cost efficient manner, to help the continuity and the survival of the business.
Depending on your business profile, we can set up the proper cover for your own specific requirements. Depending on your business we may either look at:
- Keyperson Insurance: this is life assurance which is effected by an employer on the life of a key employee, who may also be a shareholder or director to protect the company against the financial consequences of that individuals sudden or serious illness.
- Partnership Insurance: provides a lump sum on the death of a partner to enable the surviving partner to make an immediate payment to his/her estate in respect of their share of the partnership. Partnership Insurance has the benefit of ensuring that the surviving partner has the funds to buy the deceased’s share in the business without having to borrow or sell assets thus retaining control of the business whilst at the same time ensuring that the dependants of the deceased partner are financially compensated.
- Company Directors Insurance:
- Personal Shareholder Protection allows the shareholders of a limited company to provide funds to purchase the share of a deceased shareholder from their personal representatives. The life assurance contracts are taken out by the shareholders personally and this ensures the surviving shareholders retain control of their business.
- Corporate Shareholder Protection is an arrangement where the company agrees with each shareholder to buy back his/her shares from his/her personal representatives on death. The cost of this cover can be covered by the company and it ensures the security for the company and the peace of mind for the family/dependants of the deceased.