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Partner & Shareholder Protection

Each business partner or director takes out a life insurance policy on their own life for an amount equal to the value of their shareholding. The policy is placed in trust and on the death or diagnosis of a critical illness of a partner or director the other directors or partners receive a cash lump sum which can then be used to buy the affected shareholder’s shares. This method ensures that the shareholder’s family receive their part of the inheritance as quickly as possible with minimum disruption to the business.

Without adequate funds or agreements in place a company may be unable to buy out the deceased share of the business, leaving any remaining dependants without an appropriate level of income replacement and the company with the risk of an inappropriate member of the deceased family taking control of their business interests.

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Key Person Cover

This type of policy helps a business safeguard against the financial effects of death and/or critical illness of a key person. All successful businesses have one or more key individuals whose skill, experience, knowledge and credibility the success of the business depends, and without their active presence the business profitability may be adversely affected.

Business/Corporate Loan Protection

Many business owners may have given personal guarantees or even used their residential homes as security so the loss of the person or persons who have guaranteed a loan can be particularly serious for a business and also adversely affect the owners dependants. Similarly if finance has come from a directors loan account their estate may demand repayment of the loan on their death. Business loan protection can provide the funds to ensure that these outstanding loans can be repaid in full should the guarantor die and/or suffer a critical illness.

Relevant Life Cover

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 person covered dies or is diagnosed with a terminal illness whilst employed during the term. A Relevant Life Plan is paid for by the employer.  Relevant life plans can be established for employees or directors to benefit their dependents via a discretionary trust.

Who is it aimed at?

Employers looking to provide 'death in service' benefits, but with too few employees to set up a group scheme.
Directors wishing to provide their own individual ‘death in service’ benefits without taking out a scheme on all employees.
High earning individuals, such as directors, where ‘death in service’ does not form part of their ‘lifetime allowance’ (£1.5 million 2014/2015).