Business Protection

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Business Protection

Life Cover

Business protection entails protecting the business from the financial implications of a key person/Director being unable to work in the event of their death or long-term illness. For death, a lump sum can be provided to the business tax-efficiently to cover the loss of income arising from this and the costs of replacing that person.

Businesses may also wish to cover the lives of their major shareholders to ensure there is a payment to the remaining directors should one of them die. If sufficient cover is secured on the life of a deceased shareholder, it will provide the remaining directors with capital to purchase those shares to retain them within the existing shareholder base, rather than risking those shares being sold by a widowed spouse to an external party.

Such cover is also helpful to the widowed spouse, as it will offer them immediate cash in in return for the deceased spouse’s shares.

Group PHI/Life

Many employers want to offer their staff benefits in addition to the salary and pensions they already provide. Further incentives are usually tax-deductible as a legitimate business expense, and can be in the form of:

  • Group life cover – written as a multiple of salary, this will pay a sum on death of a qualifying employee to their nominated beneficiaries to be used as they wish
  • Group Permanent Health Insurance (PHI) – written as a percentage of salary covered in the event of longer-term sickness. This can ease the financial burden on both the employee and the employer of a key worker being unable to work due to ill-health
  • Group Private Medical Cover – private health cover for employees, paid for by the employer. This valuable benefit enables staff to obtain the best medical care available in the private sector, and means they are not subject to potentially long waiting lists for the attention they need.