Company life insurance is an umbrella term for a range of life insurance products designed to protect your business and your staff in the event of a death. No business owner wants to think this will happen to them or a member of their team but having the right cover in place provides stability and allows breathing space should the worst occur.
What is company life insurance?
Company life insurance provides a tax-efficient lump sum should a named person die or, depending on the cover, become critically ill. Also known as business life insurance, the types of company life cover available include key man insurance, relevant life insurance and shareholder protection insurance.
Shareholder insurance and key man cover are designed to protect the business, with a lump-sum payout providing financial stability following the loss of a key person. The money could be used to recruit and train a replacement, pay off a loan or allow business partners to buy shares from the deceased person’s beneficiaries and retain control of the company.
Relevant life insurance is a staff benefit. A type of death in service benefit, it provides personal life cover to the named person, with the payout going to their family or dependents in the event of their death. A survey by financial website This Is Money found in 2016 that one in four breadwinners or nearly 8.5m people don’t have life insurance in place. Providing life insurance as a company benefit is therefore a good way of attracting and retaining quality staff.
Does my company need life insurance?
Think about how your company would manage if it lost a director, a partner, a shareholder or a vital employee. For small and growing businesses in particular, the loss of one significant person could leave a potentially damaging gap.
If the company was unable to operate fully for a spell, your customers might go to elsewhere. You might need to pay other members of staff overtime to cover shifts or pay for training and development to update their skills to the level of the person who died. Having the right company life insurance in place is an effective way to safeguard your company’s future and see it through a difficult patch.
What type of businesses benefit from company life insurance?
All types of business can benefit from having the right company life insurance in place, from offices and shops to construction and technology firms. You might need a different type of business life insurance plan at the various stages of your company’s development, but all businesses, from small start-ups to established brands, need to futureproof their financial security.
How much does company life insurance cost?
The cost of your company life insurance premiums will depend on a number of factors, such as the type of cover needed, the length of the policy and the number of people insured. Our specialist team is here to help you find the right business insurance cover at the best price.