Your home may be repossessed if you do not keep up repayments on your mortgage.
You protect your computer equipment so why shouldn’t you protect your key people?
Key Person Protection
Put simply, Key Person Protection is a business insuring itself against the financial loss it would suffer if a key person in their business died or were diagnosed with a critical illness if chosen, during the length of the policy. Losing a key person – even for a short period of time – can have a big impact on the profits of a small to medium sized business.
Many companies don’t have the luxury of a ‘substitutes bench’ of reserve talent. With key person protection in place, if a key person dies or is diagnosed with a critical illness, the business will be able to use that money to train an existing member of staff or recruit externally for example.
Business Loan Protection
Business Loan Protection helps businesses pay an outstanding overdraft, loan or commercial mortgage, should a key person die or be diagnosed with a critical illness during the length of a policy.
Lenders often require this cover and directors may have given personal guarantees – perhaps using their own home as security – so it’s important to make sure that dependants of key people are protected.
Keeping control of the business.
The loss of a partner, member or shareholding director can have a major impact on the success of a business in terms of making sure the remaining owners keep control.
The potential problems will depend on the business type, the size of the business share, and the procedures laid down in the articles of association, the limited liability partnership (LLP) agreement or the partnership agreement if there is one.
The aim in setting up ownership protection cover is to ensure:
- The remaining business owners keep control of their business
- The estate of the owner who’s critically ill or who has died gets fair value for selling their share of the business
- The arrangement is set up in a tax-efficient way
Relevant Life Policies
Get the taxman to help pay for cover. A Relevant life policy is a single life, stand-alone death-in-service plan, providing benefits on an individual basis.
- Unique individual stand-alone cover
- Directors wishing to provide their own individual ‘death in service’ benefits without taking out a scheme on all employees
- Premiums not taxed as benefit in kind
- Premiums may be an allowable expense for the employer
With you every step of the way...
FD Financial is a trading name of Frank Damiani Limited, an appointed representative of PRIMIS Mortgage Network.
PRIMIS Mortgage Network is a trading name of First Complete Ltd., which is authorised and regulated by the Financial Conduct Authority.