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Shareholder Protection Insurance

Directors and companies need to be aware of shareholder protection insurance and what it could mean if you do not put things in place properly. Much like key man insurance, shareholder protection protects the shareholders in the event of another shareholders death or diagnosis of a critical illness. It can be set up much the same as a key man insurance policy. IE the company pays for and owns the policy, but there is also a shareholder agreement put in place. These are sometimes called cross shareholder agreements or double option agreements. They can normally be quite straight forward to set up but it obviously depends on how many shareholders there are and what the splits in shareholding is. MyKeyManInsurance can provide simple shareholder agreements and guide/help set them up along with setting up the life & critical illness part of the policy of course. We would always advise that you maybe seek the advice of a solicitor as well to help set up the policy. Especially if there is already a company will in place.

In its simplest form, shareholder protection offers the shareholders the option of buying out the shares from the deceased next of kin (wife or husband). Without a shareholder protection and agreement in place this can often cause lots of problems as the next of kin may now own a large amount of shares of a company of which they really know little of the day to days running’s. The remaining shareholder or holders may be in a position where they are now struggling to run the company an unable to afford to buy the shares from the deceased next of Kin. This now leaves the company in a very tricky position and can often cause many problems as well as a loss in share value. With a shareholder protection insurance in place the remaining shareholders can use the insurance benefit to purchase the shares from the deceased wife/husband for a pre agreed price therefore not having to find the money from their own funds. Both parties are therefore financially happy. Take a look at the video on the homepage for further in depth look at what can happen without shareholder or key man insurance.

To set up shareholder protection insurance is not always as straight forward. Please feel free to drop us an email or call us on 01702 219560 for advice for setting up or shareholder agreement documentation.

We use a range of other insurance providers and their products may be more suitable for your needs. These articles are for information only and does not constitute as financial advice in any way.

This entry was posted on Thursday, May 5th, 2011 at 4:24 pm and is filed under Key Man Insurance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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Relevant Life Insurance

Take advantage of tax benefits of Relevant Life Insurance.

You are a director of a successful business and your family have a great lifestyle that you have worked hard over the years to achieve.  Are you aware that as a director of your own company, your term life insurance could provide tax benefits while giving you peace of mind your family would be provided for in the event that something where to happen to you?  You could also provide ter life insurance for your employees – even if you only have a few.

 

Who Could Possibly Benefit

Do you currently pay for your own term life insurance from your personal bank account?

If you are paying for your life insurance from your own bank account you will be paying out of post-income tax, and if you pay for it from your business account you will probably be taxed on the payment as if it was income.  Larger companies avoid this tax by providing life cover for employees through a group ‘death in service’ life policies.

You too can now take advantage of the tax benefits available to larger companies by taking your life cover out through a ‘relevant life policy’.  These can now be written on an individual basis (not just group life cover) so are available to all companies no matter how large or small. 

 

There are tax benefits of relevant life policies available to both the employer and employees:

   1. Potential tax relief on the premiums for the employer
   2. No tax assessment of premiums on the employee as a benefit in kind
   3. Premiums are not subject to National Insurance payments
   4. The benefit is free of Income Tax
   5. Benefits do not count towards the lifetime allowance for pension purposes
   6. In most cases, benefits are paid free of Inheritance Tax.

At MyKeyManInsurance we have fully trained advisors ready to explain the advatages of relevant life insurance and are able to email more information to allow you to make a decision. If you are a director of your own company and have a personal term life insurance policy, then its something you should look into. Call us now on 01702 219560.

 

We use a range of other insurance providers and their products may be more suitable for your needs. These articles are for information only and does not constitute as financial advice in any way.

This entry was posted on Wednesday, February 23rd, 2011 at 2:09 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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Term Life Insurance

Many people get quite confused over all the different terms that are used for life insurance related products. Over the years the FSA have changed the names of some products to try and make things clearer but it takes a while to filter through and you therefore have the same products often being called different things by different people. Life insurance and term life insurance are generally the same thing. Term life insurance is a life insurance policy taken out over a specified term (amount of time) and is often related to a mortgage term. So a 25 year term life insurance will be quite a standard type of policy. As this is protecting the mortgage loan it will sometimes be confused with mortgage protection or even mortgage payment protection insurance (MPPI). A mortgage protection insurance will normally be the same as a term life insurance but will be more specifically to cover a repayment mortgage lump sum. The mortgage protection lump sum will decrease along side the mortgage loan. This is the most cost effective way of protecting a mortgage loan. A level term life insurance policy is an amount which stays the same over the term of the policy. This will be more suited to an interest only mortgage where the loan amount stays the same. Term life insurance can also have attached critical illness insurance. Critical Illness can be added as the same amount as the term life insurance or as a lower amount. It is possible to take out critical illness insurance without term life insurance but this is not very common and some insurance companies do not offer it this way. Term life insurance will sometimes include terminal illness cover. This means that the benefit will pay out if the life assured is deemed to be terminally ill and will therefore pay the benefit before they actually die.  

Term Life Insurance Quotes 

To get a term life insurance quote it is best to speak to a qualified advisor who has access to the whole of market. This means they can compare term life insurance quotes from all the companies that offer it. As apposed to an advisor who can only quote from a panel. A qualified advisor will be able to advice on the differences in cover between the insurance companies and will then make an advised recommendation. With life cover only this will often be the cheapest quote. But it may be worth looking at more expensive companies when taking out critical illness as the policies will vary in cover. Advice will also come with relevant paperwork such as a key facts document which will out lines the policy in more details and will also explain which critical illness’s are covered within the policy. It is very important to read this document carefully in order to understand the policy.

For any more information in term life insurance, mortgage protection or critical illness insurance please do not hesitate to contact us and speak to one of our qualified advisors.

We use a range of other insurance providers and their products may be more suitable for your needs. These articles are for information only and does not constitute as financial advice in any way.

This entry was posted on Monday, December 6th, 2010 at 3:28 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Key Person Insurance

Top Reasons Why You Business needs to Key Person Insurance

There are several reasons why your company needs key person insurance.  This special type of insurance can provide protection for your business against financial losses, loss of productivity, or loss of profits.

The keyman insurance was designed as a financial safeguard for companies for the loss of a key worker.  You have to admit the fact that every company has one or two crucial personnel who perform critical roles. 

If you lose your key persons due to death, disability, or debilitating illness, then the overall productivity and performance of your business could be adversely affected.  In some cases, such loss could result to bankruptcy and eventual closure. 

To prevent a business disaster, you have to seriously consider getting keyperson insurance for your company.  Here are some of the top reasons why you need this insurance. 

Profit Protection

The loss of a key man may go beyond the cost of replacement.  It is true that replacing a highly valued person is expensive.  But if he brings big business to your company each year, then hisor her loss could affect your bottom line.  With keyman insurance, the potential loss of profits could be averted.  The proceeds of the policy could compensate for the loss in order to protect the profitability of your business. 

Share Holder Protection

In many cases, a key person is also a major share holder of the company.  If you lose him or her permanently due to illness or death, then you can face financial difficulty in buying back the share of your key worker or partner.  Normally any shares will be passed on to the deceased family or partner. This may cause problems with shares then being sold to a third party. With key man life insurance or shareholder protection, you will be able to easily buy back the share of the key person. 

Protection against Damages

If a key person holds a sensitive corporate project, then you have to ensure that it will be completed to avoid financial losses.  Unfortunately, there is no way to predict the future.  Your key man could suffer from a critical illness that will prevent him from finishing the project.  Those who have stakes in the project could claim damages against you for cancelled or incomplete projects.  So you may use the keyperson insurance to compensate the stake holders to avoid costly litigation and bad PR. 

Indeed, a key man life insurance can offer numerous benefits for all companies.  This insurance will protect you from financial ruin especially if you lose a key person.  That is why you need to purchase key person insurance. If your company is adequately protected, investors and lending banks will easily give you more capital because they have confidence in the long term viability of your business. Many banks and investors will ask for a key person insurance to be in place before they will lend or invest money to the company. Banks will offer a key person insurance themselves which is often more expensive. Please speak to one of our qualified key person advisors for more information and key man insurance quotes.

We use a range of other insurance providers and their products may be more suitable for your needs. These articles are for information only and does not constitute as financial advice in any way.

This entry was posted on Friday, November 26th, 2010 at 11:51 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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Group Protection

MyKeyManInsurance.co.uk is now able to offer group protection. This can be in the form of an income based benefit or a lump sum much like a life insurance or critical illness policy. This is a great addition to our companies arm and will allow us to offer a much more suited and tailored protection policy to companies which are of a larger size. Most Key Man Insurance policies are targeted at the key people within the business, such as directors etc but the group protection can cover everyone within the company under one policy.

Group Protection Benefits
Group income protection or group life cover is a great cost effective way of providing a key benefit to your employees and is a great incentive when looking to show that you care about the person you are employing. As well as offering a cheaper way for the employee to take out life insurance, the premiums are also seen as a business expense for tax purpose. Group income protection works slightly different in that the benefit is paid out to the company much like key person insurance. If one of your employees are off with a long term sickness, a group policy would pay your company a monthly payment. The minimum deferred period is normally 13 weeks which means the benefit would not kick in until after 13 weeks of the employee being off sick.
If you are interested in finding out more about group income protection or group life cover, please could you contact us on 01702 219560

We use a range of other insurance providers and their products may be more suitable for your needs. These articles are for information only and does not constitute as financial advice in any way.

This entry was posted on Tuesday, November 16th, 2010 at 4:29 pm and is filed under Key Man Insurance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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