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Your business relies on you and your key people. While equipment and other tangible assets can be relatively easily replaced, vital personnel cannot. Business protection provision helps shield your company against financial losses incurred by the serious illness or death of key staff. It protects against prolonged periods of reduced profits and against loans being recalled upon the death of a director. It also keeps ownership under control, for example when beneficiaries inherit shareholdings.
Business protection agreements can, and often do, make the difference between survival and the decline of the business. At the very least they can ease the strain caused by seriously challenging, unforeseen events. What’s more, many schemes are very tax-efficient, making them an even more attractive investment.
Business protection agreements include:
safeguarding your business and its beneficiaries, today and tomorrow
Mouse over each of the five Business Protection Agreements to find out more
Shareholder protection agreements
These provide protection in life and in death, ensuring remaining shareholders and partners can continue to run your company in the event of the death or serious illness of another. For example, in the event that a share of the company passes unfavourably into the hands of a deceased shareholder’s beneficiary, funds will be available to recompense the family of the deceased or ill shareholder/partner for their share of the business. Often set up as a specialist business trust, they have the additional potential for tax savings.
Key person insurance
Most companies have one or more key employees – people whose knowledge and skills contribute significantly to the ongoing success of the business. In the event of their death or incapacity to work, replacing these skills can be a lengthy process and the negative impact on the business can be immense. Key person protection insures against the financial losses which death or long-term incapacity create.
Liability protection: loans and borrowings
Liability protection ensures that, in the event of the death or serious illness of a key person, the company’s outstanding borrowings are cleared. Lenders can be nervous and unsympathetic when a key person is absent: for example, directors’ loans are normally instantly recalled on death. This causes additional strain, or worse, at a time when the continuing success of the business is already compromised. A lender will often make business loan protection a condition of the loan; we can arrange this for you very cost-effectively.
Critical illness cover
When a director or key employee becomes critically ill, the business is likely to continue to pay their salary and benefits while they are absent from the business – which of course can be a prolonged period. Additionally, the business may need to fund a locum to carry out some of their duties in the interim. Critical illness cover will alleviate the financial difficulties of this situation.
Relevant life plan
Many business owners are unaware of these tax-efficient plans, which provide death-in-service benefits to the families of one or several key employees. They are particularly useful for high-earning individuals or where there are too few employees to set up a group scheme.
Families & Individuals
Life Cover (non-investment) and income protection: The plan will have no cash value at any time, and will cease at the end of the term.
If premium are not maintained, then cover will lapse.
Critical Illness: The policy may not cover all definitions of a critical illness.
For definitions of illnesses covered please refer to the Key Features and Policy Documents.
The tax treatment is dependent on individual circumstances and may be subject to change in future.
Crystal Wealth Management Ltd offers independent financial advice to individuals, families, business owners and directors
and is aimed at UK Residents only.
Crystal Wealth Management Limited trading as Crystal Wealth is an appointed representative of In Partnership the trading name of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority.
© 2019 Crystal Wealth Management Limited | Registered Office: 19 Portland Square, Bristol, BS2 8SJ
FCA registration number: 717673 Registered in the UK Company number: 04931573