Unless the need has been considered and there is an appropriate plan in place, we believe the answer is: Both need to be seriously considered.
Many of our first interactions with a client will be to give awareness on how these important insurance products interact with each other.
Ownership Protection gives everyone involved in the ownership of the business a greater degree of certainty ensuring that the deceased's family have timely funds to begin rebuilding their lives and the surviving business owners maintain full control of their business.
With statistics indicating there to be approximately a 1 in 3 chance of you or your business partner not making it to retirement age, the need for this discussion is clear.
Our clients appreciate the knowledge the surviving business owners can retain control of the business whilst knowing the deceased's estate will receive cash value in a time and tax efficient manner should they die.
By prompting this area of discussion with our clients, it allows a plan to be made, and where there isn't accessible cash to fund the plan, we bring real added value by appropriately implementing an insurance policy to provide the funds.
Key Person Protection
Key Person Cover is designed to protect a business from the loss of one of its most valuable assets - its key employees.
On a death of a key person the impact on working capital could be untold. Legal & General research shows there is a real need... 38% of UK SME businesses believing their business would cease in less than one year following the death or critical illness of a key individual.
The funds from a key person cover, when appropriately implemented with the right advice, are provided in a tax and time efficient manner to be used for whatever the business needs be it:
Why do I need to consider both areas of protection?
This is a common question we encounter. Our answer is straight forward... they are doing completely different jobs.
Our standard approach at BPS is to provide our clients with full information on what is available and what each area is protecting against to ensure informed decisions are made.
So, with this additional info in mind, we hope you could now answer the question - Key Person Protection or Ownership Protection - where is your need greatest?
Quite often, our clients determine they need both - get in touch to discuss how BPS Business can help you.