Business protection could help client owned businesses continue to trade should a key person or business owner die or become terminally or critically ill.
Proceeds from the policy could help ensure that key individuals are replaced, corporate debt is protected and shares from the deceased partner’s/director’s estate are purchased.
Many believe arranging business protection to be a lengthy and complicated process.
But actually, the principles are similar to any other type of protection.
The most significant differences are:
- Business protection generally incorporates higher sums assured.
- A claim may be paid to a business, not a family member.
Life cover pays out on the death of the insured person and there are various types of life cover, including term cover and whole of life.
- The sum assured is guaranteed throughout the term selected.
- It is normally the cheapest and simplest type of life assurance.
Flexible or Whole of Life Plans
- The original sum assured can be maintained throughout life.
- The premiums and the sum assured can be varied to suit the requirements of the policyholder.
- Most plans offer guaranteed increase options annually and for specific events e.g. the birth of a child.
- There may be a cash value on surrender.
- For terms of 10 years or less, these plans can be cheaper than term assurance over the same period.
Income protection policies are designed to provide a monthly benefit to replace earnings lost as a result of long term accident, sickness or disability. There is a choice of deferred benefit periods of 4, 8, 13, 26, and 52 weeks, which means that the benefits will not be paid until the end of this period (waiting period).
The choice of deferred period depends on whether your employees will receive sickness benefit from you, state benefits &/or benefits from any existing policies and whether your employees have savings as a means of paying for their bills over a short term period. The benefit can be level or increasing and the plan can run until retirement.
There is a maximum benefit provided by an income protection policy, and this is normally 75% of your earnings less State benefits which are assumed to be approximately £5,000 a year. The actual maximum benefit available depends on the provider’s terms and conditions however most providers adopt the same maximum benefit calculation.
Critical illness provides a lump sum payment if your employees are diagnosed with one of a number of serious illnesses covered by the policy.
These illnesses include:
- most malignant types of cancer
- heart attack
- kidney failure
- multiple sclerosis
- major organ transplant
This type of plan can be useful to complement income replacement schemes, because, as long as your employees meet the conditions for a claim, it can provide a lump sum which can be used to repay all or part of your mortgage for example.
private medical insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals.
By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement.
The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity.
The group of products known as general insurance, includes home, car, travel and accident sickness unemployment contracts. These are the essential ‘everyday’ insurance products that provide us with peace of mind in the event of the unexpected.
Although in the main Financial Relationships LLP are financial advisers we are able to help our clients reduce the cost of this vital part of their financial planning.
We are able to source insurance cover for some of the following areas directly or through our associations with other specialist advisers:
- House Contents
- Private Buildings
- Private Motor
- Commercial Contents
- Commercial Buildings
- Commercial Motor
- Directors and Officers
- Professional Indemnity
- Accident, Sickness and Unemployment Cover
- Private Medical Insurance