As every businessperson knows, the cornerstone of any good business is strong financial planning. With the right cover, your business remains protected, if the unexpected should occur.
In companies, particularly SMEs, there can be an individual(s) that are crucial, or key to the success of the company. If the company was to lose this individual(s) to death or illness, it could place the survival of the business at added risk.
At MBC Financial Limited, we assist in the process of ensuring the Company’s understanding that those people of most value tend to generate Income and should attract the same attention to
Insurance as a motor fleet or piece of machinery. Keyman insurance is the way to protect the company from these pitfalls.
Key Person Insurance or Key Man Insurance entails the application of a Life Assurance Policy initiated by a company on the life of one of its employees or directors with a view to compensating the company for an anticipated financial loss in the event of the death, contraction and survival of a specified Critical Illness, of the individual concerned.
Such a plan is designed to allow the Company to put structures and arrangements in place to financially protect the business
with a cash lump sum, capable of helping the business deal with the ensuing challenges which may involve:
The loss of a business partner or shareholder can have serious implications for any company. In the case of the death of a business partner, as well as losing a key contributor to the management of the organisation, shares in the company can pass on to their immediate family, which can pose questions for the business going forward:
Partnership Protection Insurance protects both the company and the new shareholders in the event of the death of a partner.
It’s a good idea get legal and financial advice before taking out Partnership Protection Insurance as there may be circumstances where this arrangement may not be suitable.
The loss of a major shareholder can have serious questions for the company owners and other shareholders:
In this case, a contract can be drawn up by which the company buys back the shares in the event of the shareholder’s death. As a result, Shareholder Protection Insurance could prove invaluable to protect the company from a major loss.
It’s advisable to get legal and financial advice before entering into an agreement regarding Shareholder Protection Insurance, as there may be circumstances where this arrangement may not be suitable.
Financial Planning Standards Board
Certified Financial Planner