Key manassurancequotation
Key workerprotectionis requiredto safe guard your company and most probably your families incomefrom the riskof death or series illness to a key worker. There are many forms of key workerindemnitysuch as key person cover, business cover, shareholder protection, relevant life insurance. Every company has a different need and therefore it is decisiveto speak to the correctpeople to get the greatestsuggestion. The main aim of key workercoveris to reinstateany loss of earning that might come aboutif a key worker was to die or be unableto work due to illness. If this circumstanceswere to arise the key workerpolicy would pay the company a one off lump sum. It would be utterlyup to the businesshow best they used that money. The more comon option is to either reinstatethe keyperson with short-termstaff countingcosts of education, or to subsidise the lossof profit due to the absenceof the key worker. This is a easykeyman cover, a popular policy to go along side this is a shareholder policy. Shareholder insuranceis put in place to cover the costs incurred when the companybuys back a deceaseddirectors shares. For illustration. Say there were two keyshareholders in a company, both owning 50% each. If one of these directors were to stop working, his 50% of the company would be passedonto his estate. If this were to happen, half the company would now be on the deaddirectors wife posession (for example). This can result in a number of problems, firstly the wife may wish to become an active partner and would have a huge say in where the company is going, even though she may have no practiceof being a director or indeed int he business itself. Or secondly, the wife may choose to sell the share to a third party, possibly at a reduced amount therefore cutting downthe over all company priceor even if sold at true market value, it would mean a third party director is on the board with a 50% say in the companies direction. All of these scenarios cause problems and are why 70% of companies that lose a key director, do not maintain the levels of profit noticedbefore the demiseand more often than not end up closing. With Shareholder protection, the company/surviving director has the first choice to buy the shares at a pre-agreed fee. The policy would pay out on the death and be equal or greater than the pre-agreed preice meaning the surviving director would become 100% owner with no financial change what so ever. This would eliminate any risk of shares being sold or dodgy director becoming involved and would mean the company can look to return to profitabilty as soon as achievable. There is also a life cover which is a tax efficient way for director to have life protection where the company pay the premiums, the directors life is insured, and the beneficiray can be anyone other than the director. This saves paying your premium from your taxed income, and is off set against the companies profits and therefore lowers the corporation tax for the company. on averrage a relevant life policy is about 35% cheaper than a normal policy. All these products arfe very complex and need to be set up by a qualified and regulated adviser.
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