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Financial Planning to protect the Business – Every Business Matters

Running a business is difficult at the best of times. Acquiring and keeping customers is what we do.

However, the unforeseen and the unlikely can happen to all of us in business. Financial Protection for businesses can ensure that our business survives and prevents losses being more than they otherwise could be.  It enables a business owner to continue operating. It therefore ensures work for employees and to continue to profit from operations.

Business Protection can provide financial security for the business in the event that the life assured dies or suffers from a critical illness.

In this event:

  • the business can suffer because any debts can be recalled by creditors due to loss of confidence in the business.
  • the business may lose major accounts and therefore sales if the person is seen as an important one in the relationship or business.
  • shares may be passed on to family members, with no experience, knowledge or understanding of the business, yet an expectation of a share of profits.

Business Protection life assurance policy will enable the business to pay off debts.  It will create a financial buffer to replace loss of profits and buy out beneficiaries of shares. This will maintain share ownership in the remaining shareholders hands.

The Main business Protection Plans

Key Person Protection

Is financial protection for loss of profits if someone who is essential to the profitability of the business dies or suffers a critical illness. This could be sufficient to protect against lost profits.  It is also used to recruit and train a replacement and help the business back to profitability.

Business Loan Protection

Any borrowings, including loans, mortgages or other liabilities and Directors Loan Accounts should be covered to ensure that these debts are repaid. If the person covered dies or suffers from a critical illness.

Without paying off these debts a business may become insolvent. Even a Directors Loan could cripple a business if the widow or family make a legitimate claim against the business. The sum assured can be paid to the business or directly to the creditor.

Share Protection

If a shareholder in a PLC, member