Key Man Cover
This is a term assurance product designed to protect your business against the loss of key personnel. Commonly insured individuals include directors, high level management staff or specialists. Key man cover pays a lump sum to the business upon the death of the life assured during the term of the policy. This lump sum can be used to help maintain the business, cover consultancy and recruitment costs whilst a replacement is found.
The death of a major shareholder can have a huge impact on the business, not just the shareholder’s family. It is important to ensure that the right protection is in place to make sure the process following their death is as smooth as possible for both parties.
The company takes out a Shareholder Protection policy on the life of each shareholder. The sum assured is the value of their shares in the company. A legal agreement is written up in which the company agrees to purchase the shares from the family in the unfortunate death of the shareholder.
This ensures that the company retains security and control over the business and the family of the deceased are appropriately remunerated.
Group Life & Critical Illness
It is becoming increasingly common for employers to provide benefits to attract and retain valuable employees. One of those benefits comes in the form of Group Life cover.
The cover provided by a policy of this type is usually calculated as a multiple of employee salary but can be set as a fixed amount. The main attraction for employers is that this protection can be tiered to reflect the company’s hierarchy. Base-level employees may be provided with protection equal to 2 times their salary, management employees 3 times their salary and Directors 4 times their salary (for example). This flexibility is cost-efficient for the employer whilst also ensuring all eligible employees receive benefits. The policy is provided up to a predetermined retirement date, e.g. age 65, or until the member leaves the company.
Upon the death or terminal illness of the member a lump sum payment is made which can be paid directly to the member’s beneficiaries or via the company.
A policy of this type can be held within an Occupational Pension Scheme (as long as the rules permit this) and can be beneficial with regards to tax if it is.
Policies of this type can also include critical illness, permanent disability or total disability as additional options.
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