Relevant Life cover is a tax efficient life policy that enables small businesses to provide individual death in service cover for their employees. The premiums are paid by the employer, and are usually allowable as a business expense. This means that premiums and benefits paid will normally qualify for relief on income tax, national insurance and corporation tax. The cover is also set up in trust, which means any claim proceeds are paid free from inheritance tax.
The loss of a key person within a business can be devastating, leading to a loss of profit/revenue, reduced sales, or recruitment and training costs. Key person insurance helps to reduce the financial impact the death or serious illness of a key person can cause.
The plan is normally owned and paid by the business and any subsequent pay out is made to the business in the unfortunate situation of making a claim.
The loss or serious illness of a shareholder, partner or member, can have a massive impact on any business. Shareholder Protection enables the business to ‘buy out’ the shares of a stakeholder in this eventuality. This avoids the challenging situation of working with parties who may have little or no interest in the business, or the necessary skill set to make the business a success.
If your company has outstanding borrowings such as a loan, commercial mortgage, or overdraft, Business Loan Protection could be of help.
Should a key person die or be diagnosed with a serious illness, the company’s ability to repay the loan may be affected. Business Loan Protection is designed to pay out a lump sum allowing the business to meet its debt obligations.
Business Loan Protection is especially important for guarantors. After all, your personal estate and assets could be used to repay the debt should the worst happen.
A key person, shareholder or guarantor being diagnosed with a serious illness could be equally destructive to the business as death. Critical Illness cover can be used to protect a key person, shareholder or business loan, either as a stand-alone benefit or added to a life policy to provide a lump sum.