A business life insurance policy provides your business with a tax-free lump sum if an insured shareholder, business partner or key person in the firm dies or becomes critically ill. Business life insurance is an umbrella term for a range of protection insurances including key man cover, shareholder protection insurance and relevant life insurance, and offers invaluable financial security to your business.
What is business life insurance?
Business life insurance covers your business against the loss of key named personnel. It’s designed to help you maintain financial stability and guard against disruption and the potential risk that such a loss might have on your business.
Common reasons for taking out business life insurance include:
- Maintaining control of your business during a period of potential instability
- Providing a financial stop-gap during the loss of a key person, and funding the recruitment of a suitable replacement
- Enabling business owners to purchase the deceased person’s share of the company from beneficiaries
- Paying off a business loan if the guarantor of that loan dies or becomes critically ill
- Providing tax-efficient personal life insurance for your employees as a way of retaining a valued workforce
Does my business need life insurance?
Business life insurance is an essential part of financial planning and will enable your business to continue trading should incredibly difficult circumstances arise. In the event of losing key people, business life cover can be vital in maintaining financial stability and giving you breathing space to adjust.
If yours is a small business, you may think you don’t need cover, but in fact the loss of a key member of the team can be extremely problematic for small businesses. Business life insurance is available for all sorts of businesses, including shops, restaurants, self-employed people, creatives, online retailers and offices.
What does business life insurance include?
Types of business life cover include:
- Key man insurance. This protects your business from the impact of losing an essential member of staff
- Relevant life insurance. This is an employee benefit offering tax-efficient personal life cover
- Shareholder protection insurance. This provides funds to purchase the shares of deceased shareholders, allowing you to retain full control of your business
- Company life insurance
How much does business life insurance cost?
As with all types of insurance, a number of factors affect the cost of your business life insurance policy premium, including the size of your business, the length of the policy and the sum insured. Our specialist team can help you search for the right price and cover combination to suits your needs.