Business protection is all about insuring for the unexpected. It's a way of protecting your business if something goes wrong. It can provide an essential safety net for all types of business.
The plan will have no cash in value at any time, and will cease at the end of the term. If premiums are not maintained, then cover will lapse. The policy may not cover all definitions of a critical illness. For definitions of illnesses covered please refer to the Policy Documents.
The value of protecting your partnership
One of the great risks of a business partnership is that one of your colleagues may die, with his or her share of the business passing to someone else. That person may have little interest in the business or - at worst - may be hostile to your objectives. Equally a partner who suffers a serious illness may want to retain the option of continuing in the business or be compensated for their exit from the business.
The safety net is a pre-arranged scheme to ensure the surviving partners have enough funds to buy out the interest in the business, or compensate the deceased’s family.
The following range of options should be considered:-
- Appropriate life cover to fund the purchase of the deceased’s interest in the business
- Advice on a suitable agreement to ensure the partnership continues and the deceased’s dependents or family members are compensated
- Arrangements for partners who retire, or who fall seriously ill and are unable to work
Benefits to partners
In the event of the death or serious illness of one of your partners, you’ll want to ensure that the business continues as smoothly as possible. Partnership Protection sets out the procedures and policies to help you retain control:
- Agreements, insurance, and trusts can be established to protect the business against the financial and practical implications of a partner’s death or specified critical illness
- Arrangements which can help to ensure your partnership is not automatically dissolved
- Helps to protect your business interests against hostile parties, or disinterested inheritors
- Funds available to buy out the deceased's interest in the business at fair market value
- Continuity of business prosperity
- Avoid the sale of assets to repay the departed partner’s interest in the business
- Help retain confidence of employees and customers