Protection for business partners & shareholders
This type of protection policy would provide funds in the event of a death or critical illness of a business partner or director, ensuring continuity of the business and providing security and protection for all.
Each business partner or director takes out a life insurance policy on their own life for an amount equal to the value of their shareholding.
The policy is placed in trust and on the death or diagnosis of a critical illness of a partner or director the other directors or partners receive a cash lump sum which can then be used to buy the affected shareholder’s shares. This method ensures that the shareholder’s family receive their part of the inheritance as quickly as possible with minimum disruption to the business.
Without adequate funds or agreements in place a company may be unable to buy out the deceased share of the business, leaving any remaining dependants without an appropriate level of income replacement and the company with the risk of an inappropriate member of the deceased family taking control of their business interests.
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