Insurance Services

The following questions will help you understand how well protected your business is to unforeseen events.

• Do you have any key individuals who contribute heavily to profits?
• Does the business have any unprotected loans or debts?
• Would you want your estate to receive the value of your share in the business in the event of your death?
• If a fellow business owner died, would you want to retain total control of the business?
• In the event of the death or critical illness of a key person or business owner could a cash injection help secure your future?

If you have answered Yes to any of these questions you should consider contacting us today to arrange a free initial meeting to discuss your own Business Liability Audit.

Many businesses try to protect themselves against every eventuality – buying insurance for their buildings, contents, cars and materials.

Unfortunately many don’t cover their single biggest asset – their employees. What would happen if your business lost a key employee? What would happen if one of your shareholders or directors was to die?

Key Person Protection (Profit Protection) helps safeguard a business against the financial effects of death, terminal illness, or critical illness* of a key person.

The loss of a key person may result in reduced sales, loss of profit/turnover, wasted time, recruitment costs, and the disruption of development plans or increased workloads for the remaining staff.

Who is a ‘key person’?

A key person is an employee whose death or continued absence would affect the profits of the business. Key people are individuals whose skills, knowledge, experience or leadership are important to a business’ continued financial success. Examples of a key person include, but are not limited to:

Sales director
IT specialist
Managing director
Head of product development
Technicians and R&D personnel

How does it work?

Key Person Protection (Profit Protection) is life assurance or life assurance and critical illness cover (if chosen) written on the life of the key person but owned by the business so that any money due becomes payable to the employer. The business pays the premiums. This applies to both Limited Companies and Limited Liability Partnerships. With a partnership, the policy is written on an own life basis and may be placed in trust for the benefit of the other partners.

What is Partner/Director/LLP Share Protection?

The loss of a business owner may destabilise the business and can quickly lead to financial difficulties. Partner/Director/LLP Share Protection means if the worst does happen, the remaining partners/directors/members could stay in control of the business.

How does it work?

In the event of a business owner dying or becoming terminally or critically* ill, Partner/Director/LLP Share Protection can provide a sum of money to the remaining business owners. This means that in the event of a valid claim the policy could pay out an amount sufficient to help purchase the deceased or critically* ill partners/directors/members interest in the business.

* If critical illness cover is chosen as an additional option.
Goldstone Wealth via your tailored “Business Liability Audit” can help highlight to you estimates around the value of your business and assist you with establishing the required sums assured for shareholders or partners.

What is Business Loan Protection?

The loss of the person(s) who have guaranteed a loan is particularly serious for a business. Business Loan Protection helps your client pay an outstanding overdraft, loan or commercial mortgage, should the guarantor die or become terminally or critically* ill.
* If critical illness cover is chosen as an additional option.

How does it work?

Business Loan Protection is life assurance (sometimes life assurance and critical illness cover) written on the life of an individual or individuals. When a valid Business Loan Protection claim is made, a sum equal to the outstanding debt could be paid to either the business or directly to the lender.

Relevant Life is a life insurance policy available to employers to provide an individual death-in-service benefit for an employee. It can help smaller businesses attract and retain high calibre staff by offering them attractive benefits packages that are also tax-efficient. It can also be a tax-efficient way for sole traders to take out life insurance.

What Are The Main Benefits of Relevant Life Insurance ?

One of the main ones is that there can be tax benefits for both the employer and employee.

• Employer benefits:
• Corporation tax relief (so long as the premiums are wholly and exclusively for the purposes of the business)
• No National Insurance contributions to pay on the premiums paid to fund the Relevant Life policy.

Employee benefits:

• No National Insurance contributions to pay on the premiums paid to fund the Relevant Life policy
• Benefit won’t be taxed as a benefit in kind
• Premiums and benefits don’t count towards annual or lifetime pension allowances.

Relevant Life cover are generally portable, so the person insured can take it with them if they move jobs. They can then either continue making the policy payments themselves, or ask their new employer to take over this payment as part of their benefits package. Any employer who makes the payments on their employee’s behalf may be eligible for corporation tax relief on the premiums.

This information is based on our understanding of current legislation, taxation law and practice, which may change. The value of any tax relief depends on the individual circumstances of the investor. Please contact Goldstone Wealth for further details.

To arrange a “Business Liability Audit” for your business please contact Goldstone Wealth today.