At Temple Health we provide comprehensive business protection solutions designed to reduce the financial impact on our client’s business if someone key to the business dies or suffers a critical illness.
The financial impact following the death or critical illness of key individuals can put your business at risk, it can cause loss of profit, interruption to cash flow and much more. The financial burden could be so great that the business is unable to continue.
Our business protection solutions offer both life cover and critical illness cover benefits, and plans need to be structured according to the specific business need, which could be:
Relevant life protection
A relevant life policy is a standalone single life policy. It’s an alternative way for employers to provide death-in-service benefits to their employees. This type of policy is ideally suited for high earning employees who don’t want their death-in-service benefit to form part of their lifetime allowance. Also for small businesses that do not employ enough staff to warrant a group scheme.
The policy must:
- Only provide a lump sum death benefit, before the age of 75
- Only be payable to an individual or a charity
- The policy must be written on a ‘life of another’ basis, with the employer as the plan owner and the employee the person covered
The policy must not:
- Provide any other benefit
- Have a surrender value
- Be used mainly for the purpose of tax avoidance
The primary advantages:
- The benefit does not form part of the employee’s lifetime pension allowance
- The payments made will not form part of the employee’s annual allowance
- The payments employers make are not subject to income tax because they are not normally assessable to the employee as a benefit in kind
- These payments can be treated as an allowable expense for the employer when calculating their tax liability, as long as the local inspector of taxes is satisfied they qualify under the ‘wholly and exclusively’ rules
- In most cases the benefits are paid free of inheritance tax – provided they’re payable via a discretionary trust
Shareholder Or Partnership Protection
If you are a shareholding company director or a partner in their own business, your share in the business is likely to be one of their most valuable assets. But how do you ensure that those left behind after your death are financially compensated, or allow the director or partner themselves to receive appropriate financial compensation in the event of a critical illness?
Shareholder or partnership protection can offer a solution by combining a means to provide the funds to match the value of the business share, together with a legal agreement to facilitate the exchange of plan proceeds and the business shares or partnership share.
Key Person Protection
Most businesses include at least one individual who is vital to the success and profitability of the business – they are a ‘key person’.
The death or illness of a key person can financially impact your business in a wide variety of ways. For example, there will be costs involved in recruiting and training a replacement, a loss of sales and new contracts and so a loss of profits, resulting in a loss of confidence in the business. It can also put additional pressure on senior personnel covering the key person.
Key person protection can provide the finances to help your business cover the financial impact of the death or illness of the key person.
Business Loan Protection
Many businesses rely on ongoing credit lines and loans to finance the day to day business activity. Consequently a business must consider not only how to meet any ongoing repayments but also how to finance full repayment should the lender call-in the loan prematurely, perhaps as a result of a premature death in the business or a key individual suffering a critical illness.
Business loan protection can provide a business with a lump sum that can be used to fund repayment of a business loan on the death or earlier critical illness of the insured ‘key individual’.