Two life insurance policies that go hand in hand in a business partnership.
Key man is simply the insurance that gives a business a financial lump sum should a key person meet their untimely demise. This allows the business to cover cash flow, meet its bills, pay for recruitment fees of the replacement and fund the salary of said person until the business is stabilised.
The only question you should ask yourself as a business is “Can we afford not to have this cover”?
Key man cover can also be sort for critical illness that will cover the main people in your organisation should they be diagnosed with a dreadful disease.
Whilst they recuperate fully the business is left with funds to meet their replacement during their convalescence.
Shareholder protection in simple terms is designed to ensure that the aftermath of a shareholder’s death is as stress free as possible and any transitional processes are smooth. The legal agreements that are drawn up by a solicitor or accountant will set out how shares are to be managed if a stakeholder passes away avoiding complications with the beneficiaries or family.
Age, health, smoker status, amount of cover and term will all affect the premium levels.
A review of the business and its aims and objectives will clarify the level of cover realistically required. This review will be undertaken first to determine exactly what cover it is that you need in the first instance.
Premiums are totally tax deductible and can be paid for from the company accounts for both policies.