Protecting the Assets of a Business
In work we do not always consider what would happen in the unfortunate event that a business partner dies, leaving the other partner to manage the business alone. But it is worth considering as not all business partnerships can be replicated with a partner’s spouse.
In terms of inheritance, by law, a spouse would inherit the shares in a company on death, which could pose a problem if the spouse or the surviving business partner do not wish to develop a new working arrangement with both involved.
Shareholder protection is a life insurance plan that enables the purchase of the shares from the spouse so that, in the event that the spouse is not continuing in the business, they can receive payment instead. This insurance can be managed by something known as a cross -option arrangement and should be detailed in business partners’ wills.
Key man insurance
If there is someone within a company who has a specific set of skills that cannot easily be replaced then key man insurance could help. This type of insurance can be either through income protection or life insurance. This type of insurance helps to bolster the company by supporting it with its continued obligations in the event that the “key man” is no longer available.
Private Medical Insurance
This should be considered alongside Key man insurance when considering a business’s continuity plan. Having access to quick and efficient treatment by paying for private medical care could be the difference between a company surviving and a company going under.
Relevant Life Insurance
Life Insurance is set up for the business partner via the company making it not only tax efficient but also enabling the business partner to ensure the financial security of a spouse or family member on death. This type of insurance is set up so that the proceeds from the insurance policy go straight to the beneficiary.
At Brighter we urge everyone, even more-so if you have your own business, to have suitable insurance in place to protect you and your loved ones.
You may not be sure whether insurance is or is not right for you, but if you have your business we recommend a review of your assets, at the very least, by one of our independent insurance advisers.
We will check to see what you already have in place, whether you want the business to continue in the event of your death or an illness and whether we an help you make tax efficient insurance premium payments via your company to make it more tax efficient.
As part of a wider financial services business we are here to help you determine the right business plan for you, helping you invest and grow and reap the benefits of careful business and insurance planning.
If you would like us to review your business insurance needs, we can provide you with immediate guidance if you complete the short answer contact form below. Once you have completed your contact details and the questions, please hit the ‘Submit’ button to send it to us here at Brighter.