If you run a small business as a Limited Company, you’ll have no doubt at some stage worried about the ‘what ifs?’. How would your business fair if the worst happened to you or one of your team, be it a shareholder, director, or key staff member? We know our stuff at Sandbourne, providing companies across the UK with bespoke cover protecting their shareholders, directors, key staff and more with extensive cover to financially underpin their businesses.
Relevant Life Insurance is tax-efficient life insurance obtained through your company for employees and salaried directors. The premiums are paid by the business and are usually treated by HMRC as an allowable expense, so make for a great alternative to a personal life insurance policy in these circumstances.
Frequently used by smaller limited companies (even those with just 1 salaried director), it can also be used for larger firms with multiple partners. All plans are written into Trust to realise the tax savings, which has the added benefit of assisting the beneficiaries to receive the payout faster as well as mitigating inheritance tax charges.
Although it can sound a little complex, we’ve arranged plans for hundreds of businesses in this way to make the most of their cover and protect employees’ and directors’ families in the toughest of times. Our experts make sure that whichever plan you may choose, it is set up correctly to ensure the cover provided is as intended.
Although similar to Relevant Life Insurance in that the company pays the premium, with Keyman Life Insurance the payout goes to the company rather than the insured’s family. This provides small businesses with vital insurance designed to mitigate the financial loss of a key member of staff, be that a director or specialist within the firm.
Having Keyman Life Insurance in place provides a level of breathing space, granting the firm a financial cushion during a difficult time so it can adapt. The benefit can also be used to train existing staff into a new role, or for the costs associated with recruiting a replacement.
Keyman cover is relatively inexpensive and usually pretty straightforward to set up. You can also take out Critical Illness Cover too, so if your key member of staff were to experience a serious illness the company would again be financially protected.
Executive Income Protection is a company-paid and owned accident and sickness insurance, which pays a monthly benefit to the business should the executive or director of the firm be unable to work due to illness or injury.
There are tax advantages, higher maximum cover amounts and other benefits for directors who take this form of income protection through their business. It can also cover dividends and directors’ loans, and even dividends normally distributed to a spouse in certain circumstances.
In a limited company with more than 1 shareholder, it’s important to bear in mind that should the worst happen to a shareholder, the shares would normally transfer to their beneficiaries - usually their family.
Typically a family could end up with shares in a business they have no interest in, with the remaining shareholders similarly inconvenienced at what would be a difficult time for both parties.
Shareholder Protection along with special agreements set up alongside, ensures that the agreed value of the shares is paid to the beneficiaries by way of an insured amount - ie at no cost to the remaining shareholders.
Calculating the amounts to insure and the associated agreements can be a complex undertaking but is obviously important to get right. That’s why our team will get to know the ownership structure of your business and the valuation method for the shares, where they can then present you with options to suit your company’s and fellow shareholders’ needs.
Need to make changes in the future?
No problem! As with all our clients, all you need to do is let us know if your circumstances change and we’ll do the leg work.
Having Private Health Insurance in place as a small business can be an important cover and not just a bit of a luxury. Being unable to work due to illness can have a significant impact on your business, so Private Health Insurance can get you seen and treated quickly helping both your health and a speedier return to work.
Get in touch with us today if you think we can help you and your company, and see if we can find you that piece of mind.
Personal and Business Insurance Specialists
