Business Insurance

Key Man Insurance is one of the most important insurances for business people. The death of a key person in a small company often causes the immediate death of that business. Key Man Insurance will help the business survive despite losing the person who makes the business work. The family of the business owner can use the insurance proceeds for expenses until it can find a replacement manager or director, pay off debts, distribute money to investors, pay severance to employees and ultimately close the business down in an orderly manner if that is what needs to be done.

Where there are several business partners, a policy is taken out for each person, reflecting the value of the business relating to that person’s position, agreed by all parties. Remember, it is important to re-value these policies on an annual basis as things change.

If one of the partners then passes away, the surviving business partners can buy out the deceased partner’s shares (holding in the business), meaning:

• The business has the money available to buy the shares from the beneficiaries of the deceased partner’s estate;
• The business can keep the shares and keep control;
• The deceased’s family will be paid market value of any shares.

Having Key Man Insurance gives the family choices. And time.

If your business is just you, and your family depend on your income to survive, personal life insurance is a must. 

TLB Planning will arrange your life assurance and help you write your policy in an Assurance Trust. This is a trust that has been designed to specifically hold the benefits of a life assurance policy so that if and when a claim is made on that policy, the money is paid into the trust, and not the deceased persons’ estate. The benefits of this are:

• Life policy proceeds are paid to the family free of Inheritance Tax;
• Life policy proceeds can be paid prior to Grant of Probate, thereby side stepping long delays in the family receiving payment;
• The funds held within the trust are protected from any challenge or variation of the Will following the business owners death;
• Funds can stay in the trust for up to 125 years if the beneficiary is not in a position to receive them (under 18 or lacking mental capacity);
• Funds are separate from the beneficiaries estate, so the person receiving them can benefit from the money without it forming part of their own estate and being subject to Inheritance Tax when they pass away.