Protect your Business
Key Man Cover
Most businesses buy insurance to cover what they believe to be vital to business continuity, such as their buildings, their stock and equipment. However, the most important asset of any business are the key executives who drive the business profitability.
Key Man Insurance is life insurance purchased by the employer on the life of an employee (the key man) whose services and know-how are instrumental in contributing to the profits of the business. The company owns the policy and pays the premium and if the key person dies or is disabled the proceeds are paid to the company.
Have you ever considered what would happen should you or one of your business partners become disabled or die?
Disability and death are not things that we like to think about, but if one of the business owners were to die or can no longer work, would you and the other owners be able to afford to buy their business interests? A simple solution to this problem is a properly structured agreement that guarantees that on the disability or death of a business owner the necessary funds will be available to buy their share of business using the proceeds of a life insurance policy.
This means you can protect you loved ones by ensuring your business partners have the funds available to buy your equity should anything happen to you. Conversely, you can also cover your business partners, ensuring you have the ability to purchase their shares rather than acquiring a new partner, should anything happen to them. It is important to seek the advice of a legal professional when drawing up any shareholder agreement.
Group Life Cover
Group Life insurance is a type of life insurance in which a single contract covers an entire group of people. Typically, the policy owner is an employer or an entity such as a network or affinity group and the policy covers the employees or members of the group.
Group Life insurance is often provided as part of a complete employee benefit package and in most cases, the cost of group coverage is far less than what the employees or members would pay for a similar amount of individual protection so if you are offered group life insurance through your employer or another group, you should usually take it, especially if you have no other life insurance. As the policy owner, the employer or other entity keeps the actual insurance policy, known as the master contract and those who are covered typically receive a certificate of insurance that serves as proof of insurance but is not actually the insurance policy.
As with other types of life insurance, group life insurance allows you to choose your beneficiary. Group Life insurance is typically provided in the form of annually renewable term insurance and when provided through your employer, the employer usually pays for all of the premiums. The amount of your coverage is typically equal to three or five times your annual salary and may also include disability coverage. Group Life insurance coverage remains in force until your employment is terminated or until the specific term of coverage ends. Even though Group Life insurance may appear to be cost effective it is important for individuals to consider personal cover at the same time since it may be too late to obtain cost effective individual cover after they have left employment.