Company loan Protection
Typically businesses take out a loan and in turn it is common for the bank or lending institution to insist on having a Business Loan Protection or insurance policy taken out on the business owner/ director’s after applying for the loan.
A company loan protection policy is designed to insure the loan if there was a death or critical illness which effected loan repayment. Normally the banks or lending institutions will provide a Business Loan Protection policy at point of sale but they are far from competitive and seeking independent advice is always the best way to gauge the different options available.
Personal Accident Protection
Personal Accident Protection is an annual insurance policy, which provides compensation in the event of injuries, disability or death incurred after accidental, external and visible events. A personal accident protection plan differs from life insurance and medical & health insurance due to the fact that it is a complementary policy.
Personal accident protection can be taken out individually or as a group policy for your family and/or employees protecting you and them anywhere in the world, at any given time in the event of an accident occurring.
The scope of cover and scale of benefits differ between insurance companies and you should therefore ensure that you purchase a policy, which meets your requirements.
Accidental Death Protection
If you die as a result of an accident, your Accident Protection benefit is paid in full. Accident Protection is one of the most cost effective protection products available.
Terminal Illness Protection
Terminal illness protections provide extra protection; we recommend that your life assurance policies include a terminal illness benefit. If a terminal illness was to be diagnosed before the expiration of your life assurance plan, then the death benefit will then be paid and the plan will cease.
Permanent Disability Benefit
If an accident causes the loss of, or permanent loss of use of a limb, part of a limb, or your sight or your hearing, you may claim a percentage of your Accident Protection benefit. The percentage that you can claim is dependent upon the severity of your loss. If you lost the sight of both eyes, or you lost the use of both legs, you could claim the full-insured benefit. Lower percentages of the benefit are paid for disabilities with a lesser degree of severity.
Director Share Protection
Although a company will not be dissolved on the death of a director, the surviving directors run the risk of his shares passing to someone with no interest in the company, or even to another company, which might then be in a position to make a takeover bid. When a director shareholder dies, his shares will pass to his estate – which will often mean to his widow. She may not want to retain them and may have no knowledge of the business. Questions to consider:
- Do they know how to run your business?
- Do they want to run your business?
- Would they rather sell their share and invest the monies?
- She could well prefer a cash settlement and if the surviving directors will not, or cannot buy them, she may try to sell them to someone else, although there may be restrictions on the transferability of the shares in the company’s Article of Association.
- Have your co-business owners got the money to buy your share?
Often the surviving directors will want to keep control of the company and probably would not like the deceased’s wife or next of kin to sell the shares to a perhaps unknown third party with whom they may not be able to work with amicably.
Partners face the same problems as directors with life assurance an essential requirement to ensure that the business can continue on the death. If a partner dies or contracts a serious illness, their co-partners will, in most cases, have to make a payment to the personal representatives (on death) or the partner (on critical illness).
Key employee protection
The success of many businesses is dependent upon a number of key individuals. You can protect your business against the financial loss that might occur if one or more of these key employees dies premature or becomes seriously ill.
- How would your sales figures be affected if your top sales consultant died premature or suffered a serious illness?
- How would your project(s) be affected if your Senior Project Manager suddenly died or became seriously ill?
- How would your Company’s finances be affected if your Financial Guarantor suddenly died premature or became seriously ill?
Company Loan Protection
A business would be prudent to insure it’s key employees to the extent of the financial commitment of the Company’s loans and overdrafts. In most instances the lender will insist on key person cover to protect the borrowings of the Company. How much debt & other payment liability does your Company carry?
- Would your Company’s debt & future financial liabilities be repaid in full if one of the key employees died prematurely?
- Would your Company’s debt & future financial liabilities be repaid in full if one of the key employees suffered a critical illness?
Directors Retirement Planning
A pension scheme for the directors can be more than just a retirement savings plan. For the shareholders the pension scheme can be the most tax efficient means of extracting profits. The scheme can make loans to the Company, purchase and lease the Company premises and even purchase shares in the Company.
Director Health Insurance
A health insurance scheme for the directors can be more than just a vehicle to protect against medical bills for the shareholders; the health insurance scheme can also protect the company against catastrophic medical bills and the financial well-being of the Company.