Business owners are very aware of how important key personnel, including themselves and their partners, are to the business. At Donoghue Financial we provide a range of protection benefits that can be key to a business.
Key Person Insurance: People are often a company’s biggest asset and losing a key person can be very damaging. The business could be hit by a loss of profit, reduced sales, recruitment/training costs, or disruption to their plans.
That’s why key person protection makes good business sense. To help reduce the financial impact on their business, your client can take out a life insurance plan, with or without optional critical illness cover, to cover the life of the key person. This plan is owned by the business, they pay the premiums and any pay out is made to the business if they find themselves in the unfortunate situation of needing to make a claim.
Shareholder Protection: Shareholder Protection/Partnership Protection or Company Buy Back Insurance is a means of solving the financial problems that can arise following the death of a shareholding director.
The death of a company director causes major problems for:
The surviving directors, and the deceased’s personal representatives or the deceased’s next of kin.
Problems for the surviving director
A new business partner
Loss of control
Inability to buy out the new shareholder
Personal representatives/next of kin
No ready market for the shares
Cash flow difficulties
A solution for everyone in this situation is to take out a Life Insurance or Serious Illness Insurance on the life of each director. At Donoghue Financial we have access to 6 providers that can offer this facility.
Business Loan Protection: If your client has a business loan, their business’s ability to repay that loan could be at risk if a key person was diagnosed with a critical illness or died. So they need to consider business loan protection, especially because lenders often make it a condition of the loan arrangement. Many clients feel they have to take out this protection wherever they got the loan but this is not through. By coming to an Independent advisor, like Donoghue Financial, a business could save many thousands over the lifetime of the loan.