Business package - Professional protection for your client’s business

Vintage mobile phoneMost businesses make sure they’re covered against the effects of fire or burglary – but what about their people? Financial protection is a crucial part of the planning process for any business - unfortunately, it’s one that’s often overlooked.

Protecting a business doesn’t have to be more complicated than protecting a mortgage. The effects of someone dying or suffering a critical illness are just as devastating and could have serious financial consequences for any business.

By using a menu approach to business protection, you can help protect your client’s business. 

For example, if your client is a shareholder within a business they could apply for all the cover they need in a single application even if each cover needs to be owned differently.

£234.64

Our example business could have the following protection in place for £234.64 a month, which would provide cover for a range of needs for both the shareholder and the business:

  • £200,000 worth of Life or Critical Illness Cover written under a business trust to provide money to buy your client’s shares should they suffer a critical illness or die.
  • £85,000 worth of Key Person Income Protection owned by the business to replace any loss of profit if your client’s unable to work.
  • £125,000 worth of decreasing Life Cover owned by the business that could be used to repay business loans if your client was to die.
  • Waiver of Premium (Sickness) that would cover any premiums if your client was injured or too ill to work which means that valuable cover would remain in place.

Then if your client suffers a heart attack and they have to spend some time recuperating, this cover could support the business with the Key Person Income Protection helping to minimise the interruption to the business by replacing lost profits.

But what would happen if that shareholder decided not to return and wanted to sell these shares? 

The Life or Critical Illness Cover written under a business trust with a supporting cross option agreement in place allows this to happen quickly. Having business protection in place would give the remaining shareholders the financial support to remain in control of their business as they could use the pay-out to buy your client’s shares. 

Without this type of cover, there’s always the chance that the shares could be sold to someone else - maybe a competitor.  And if they died the life cover would also pay out, allowing the business to repay its debts.

The added benefit of a menu plan is the flexibility to amend the cover should a change occur in the future, which is more likely in a business than a family. This could be a key employee leaving or retiring, or the company taking on a loan to help with expansion plans.

These are obviously just suggestions - you can create your own package from any of our covers, tailoring them to suit your client’s needs and budget.

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Key Person Income Protection - Make sure your client's business is protected if a skilled employee can't work because of an injury or illness.

* This example is for illustration purposes and does not represent actual customers. Quotes are based on a client who’s a non-smoker and aged 47 next birthday. Plan term is 15 years with a deferred period of 8 weeks. Premiums are correct as at 15 November 2017. For full details of risk factors, exclusions, limitations and terms and conditions, please see our plan details.

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This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit royallondon.com.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London EC3V 0RL.