Generally speaking, business life insurance can be used for a number of reasons, these include:
- Protect the company against the death of a valuable employee
- Provide the funds for the business to operate as normal in the event of a key worker passing away
- Save money on a policy
- Provide a benefit to employees
What a business life insurance policy will be used for will depend on the type of policy taken out.
If taking out group life insurance, such as death in service, it’s likely this will form part of the employee benefits package offered by the company.
This type of benefit can be useful in creating a happy workforce.
Relevant life insurance can act as a benefit to those working in smaller businesses who won’t be suited to death in service.
Company directors can also use this type of life insurance as a business expense, helping them to save money on a policy.
Keyman (or key person) insurance will help to ensure that the business will have the funds to continue running, with minimal disruptions, in the event that an important member of staff passes away.
You may also want to consider taking out:
- Business protection insurance
- Ownership protection
Business protection insurance can help to protect any debts you may have incurred through your business (for example, loans, mortgages or credit cards).
A policy can be taken out by a business owner or employee and, upon their death, the pay out from the policy will be paid back into the business to help pay off outstanding debts.
If a shareholder (or partner) of your business was to pass away, having ownership protection in place will provide the opportunity for their shares to be bought back by others within the business.
Without this form of cover, their share of the business could become the ownership of their loved ones.
With ownership protection, each shareholder will take out a policy that represents their share in the business, with an option to buy this share upon their passing being given to other shareholders.
We don’t provide these cover options at Reassured.