With all the opportunities of the new year filling your inbox, don’t ignore the less interesting, but extremely important subject of insurance to protect your business and your family in the event of your death or incapacity.
It’s all too easy to ignore the possibility of death or serious illness during your working life on the basis that, hopefully, it will not happen to you. However, a well run business should always be planning for the unexpected and that should include unexpected health issues suffered by its key people.
There are a number of insurance products available which allow individuals and businesses to insure against death and critical illness.
The 3 main types of insurance are as follows:
- Relevant life: This is a very tax efficient form of life insurance which can be paid for by a company without any P11d consequences. It pays out a tax free lump sum to your family on your death.
- Key person insurance: This pays a lump sum to your business in the event of a nominated individual dying or suffering a critical illness, to fund a replacement and/or compensate for lost profit.
- Shareholder /partnership protection: This provides funds to allow the continuing partners/shareholders to buy out the shares/partnership interest held by the estate of the deceased or the critically ill partner/shareholder.
In addition to the above you should consider taking out personal critical illness cover which would pay out a tax free sum to you if you suffered a serious illness.
Although the cost of insurance is offputting given that (hopefully) it may be a wasted cost if no claim is ever made, the question you need to ask yourself is whether you, your family and your business can afford not to have insurance in place should the worst happen.
If you would like to discuss putting in place insurance to protect your family and your business please get in touch with your normal RG contact.