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Protecting your Business

How would the business cope if its most valuable employee died?

If one of the directors of a company dies, what will happen to their shares?

If the business has any loans, will these be called in if a key person dies? If so, how will you raise the money?

Whether it's to provide funds to purchase shares when a director dies, or give the business a cash sum to compensate for loss of revenue, having life assurance can simply be the difference between a company surviving or not. Here are some of business protection options:

Shareholder Protection

If you are a joint-owner of a business, have you thought about what would happen if one of you dies?

You'll probably leave your share of the business to your family and it's likely that the remaining shareholders will then want to buy these shares. But are you sure that this would possible in practice - in particular, would the money be available for them to make the purchase?

Shareholder protection provides you with the assurance that, if one of the business owners dies, the remaining owners will have sufficient funds to buy the shares from the deceased's family. This creates a mutually beneficial situation where your family is guaranteed to receive the value of your shares, and the surviving owners are guaranteed the funds to take full ownership.

Key Person Insurance

Many businesses are lucky enough to have particularly valuable members of staff. They may be top sales people who bring in a large percentage of your turnover, or operational staff who would be both expensive and time-consuming to try to replace. Either way, it is likely that it would be a serious risk to the business if one of these employees died.

Key person insurance provides life cover to make sure that the business is financially protected from the loss of certain employees. The cover amount might be designed to replace the income lost from a sales person, or to provide funds to recruit and train a new employee.

The cover is usually very affordable and can save a business from considerable financial pressure.

Business Loan Protection

Most of us have personal life assurance policies to cover our mortgage, but often this is not the case with business loans.

If your business has a loan and one of the owners or directors dies, it is possible that the loan provider may put pressure on the company to repay their debt. This is the last thing the company needs at such a stressful time.

Business loan protection ensures that your company's loans and debts will be repaid on the death of the lives assured, allowing the company the time to recover from such a loss.

Relevant Life Plans

This type of policy is often overlooked, and is designed to offer death in service benefits for directors and employees. The real benefit lies in the tax efficiency.

As the premiums are tax deductible and paid by the company, rather than from the director's/employee's earnings, the net saving is often as much as 59%.

So whether you're an owner of a company looking to save money on your life assurance, or you're wanting to provide your employees with a valuable benefit, Relevant Life Policies are an essential consideration.

Private Medical Insurance

With waiting times for specialist referrals and appointments, and long delays in necessary operations, private medical insurance is becoming increasingly popular - whether it's for the business owners, or as a valuable employee benefit.

There are many different options to choose from and it's important to seek advice on the cover that you and your company actually require. Your location alone can make a huge difference in deciding what cover is necessary, given the particular hospitals in your area.

If you have an existing policy, it's always good to review the cover to make sure it is still appropriate and check if there are better options on the market.

The importance of advice

With all of the various business protection options, it is difficult to know where to start.

Having spent time to learn about your business, we can present our recommendations to you - showing you all of the ways that you can make sure your business can remain financially stable even in the most difficult times. We can also work with you to put together employee benefits that truly reward your valuable employees.

There is no cost for reviewing your business needs and presenting the proposed solutions. If you choose to go ahead with the policies we recommend we may receive commission from the provider but there is no fee to the business.