Company Directors Life Insurance QuotesLife Insurance for Company Directors

 

COMPANY DIRECTORS LIFE INSURANCE - What is it all about ?

You have probably insured your Stock, Building Premises, Vehicles & also have Public Liability etc. Yes, they may all be important Assets but what about the People who work there - your Key Personnel ? 
Company Directors Life Insurance Policy


"Men & Women, not Machines, are the real source of Profits of any Business"
 Andrew Carnegie 1835-1919

> What if a Company Director or Key Person were to die or be critically ill ? How would your business survive?

Would your Business survive? Your Business Bank or Shareholders will be concerned about the future of your business ?

Key personnel are someone who brings money into the business, it may be someone who has specialist skills or knowledge or it may be someone on whom the business depends for loan finance. Examples of a key person - could be you or your fellow Company Directors.

Tax Relief on Premiums ...Is that a Company Directors Relevant Life Insurance Policy ?

A Relevant Life Insurance Policy is a single life death in service (DIS) plan paid for by the employer on the life of an employee [ this can include Company Directors paying tax under PAYE ]. Unlike some group DIS schemes there is no minimum number of members, making this ideal for small businesses. Relevant Life Policies also do not count towards an Individual's annual or lifetime allowance.

Subject to the "wholly & exclusively rules" Relevant Life Insurance plans are an allowable deduction for business against corporation tax, but they are not treated as a benefit in kind. This results in no NI liability for employer or employee plus no income tax liability for the employee on the payments into or any sum assured paid out under this tax efficient plan.

Example: XYZ Ltd takes out a relevant life cover policy for £200pm on Mr Jones the Company Director providing lifecover for his loved ones. They pay no income tax, or NI on this £200pm but can claim 20% corporation tax as an allowable deduction of £40pm = net cost £160pm. 

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COMPANY DIRECTORS & LIFE ASSURANCE COVER

An insurance designed to help compensate a business for the financial loss on the death, long term sickness or serious critical illness for example; cancer, heart attack, stroke, diabetes - of a company director or key person. On any events as just specified, a lump sum or income may become payable to the business to use to compensate for the loss of that key person. Other factors -

What & why should I consider insuring the Company Director for ?
Consider the following issues:-

* The cost of training or recruiting replacement staff.
* The effect on profitability if the Company Director were to die or become ill or disabled.
* Business Finance that could be recalled on the Company Director's death or disability.

* Proportion of Business Profits - Take into account their salary, annual profit or the time it could take to replace them.
* Term - Cover can be effected by way of a term life insurance provider policy and this term will depend on individual circumstances.
* Taxation position - We recommend that your accountant advises the local inspector of taxes is consulted prior to the inception of a policy to understand your individual tax position.

COMPANY DIRECTORS LIFECOVER - SHAREHOLDER PROTECTION 

Shareholder Protection or Share Protection helps provides Insurance for the financial loss on the death, long term sickness or critical illness thence retirement to give the remaining directors a lump sum to purchase the shareholding from that shareholder or the deceased's estate. A suitable Shareholder Insurance policy effected alongside a legal partnership / share agreement could help prevent the following issues:

* A shareholding may force a change in the balance of control of a Company.
* The business could be split up if shares in a Company are left to a number of beneficiaries
* You could be subject to a takeover bid from a competitors if their is insufficent funds to move forward
* Remaining partners may not have sufficient funds to acquire the shareholding which could lead to a forced sale
* On death, Company shares may pass under will or intestacy to people who maybe disinterested or unsuitable
* Loss of confidence by the Company's bankers or investors.

Business Trusts & Legal Agreements

Legal Agreements - Business protection policies should be written to reflect the requirements of the partnership / shareholder / key person agreement. Whilst we are unable to provide specific legal advice we can give generic information regarding the typical agreements used.

Double or Cross Option Agreement 

Both parties enter into an agreement where, if the surviving shareholders exercise the option to buy, then the deceased's estate must sell. If the deceased's estate exercise the option to sell, then the surviving shareholders must buy.

Single Option Agreement

Applicable in the advent of Critical Illness or Total Disbility, an option compelling the other shareholder's to buy their shares.

Buy & Sell Agreement

On death the estate is obliged to sell. The surviving partners are therefore obliged to buy.

Life Insurance Trusts

Policy is set up by Trustees in a Trust to ensure policy proceeds get payable for the benefit of other parties

Life of Another 

A Policy is set up to ensure that the plan proceeds get directly payable for the benefit of other parties not oneself

Once suitable agreements in place, the life insurance can be calculated with the following issues:-

* The value of Business goodwill
* The value of the capital or shares held 

Click here to obtain Shareholder Protection advice and quotations.

 

 

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This website is intended for UK consumers & any information contained therein is for Generic Guidance only and is not to be construed as advice. 
For protection we offer products based on a fair and personal analysis.

By completing one of our no obligation quotation request forms, you may be provided with comparison protection quotes, key facts from leading Providers - based just on the basic information you have provided. Note: These quotes will not take account of any personal, health or lifestyle issues unless a full application is completed. You also consent for us to then kindly contact you by phone - where we may offer Professional Broker help & guidance if needed. We may as appropriate then help to arrange a suitable protection policy based upon your own circumstances & needs after a further review by "advice & recommendation". This will usually be on a non face to face basis.

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