For many of Britain’s 1.2 million businesses that employ people beyond the business owners, the loss of a key employee can even affect their overall financial viability. The solution is simple – money. Extra cash can allow a business owner to buy in resources, pay overtime, sub-contract or pay for whatever other solution is needed to get through the crisis. The issue is where that money comes from. It could come from the business owners – but that may not be convenient or could create added financial difficulty. Borrowing from the firm’s bankers or other backers may be possible – but that is never a certainty and, in any event, will have to be paid back later and could take time to arrange. The third option is insurance. Keyperson insurance recognises that many firms have key individuals they rely on to generate turnover or profit. As long as there is a financial need, the business can take out insurance on the life of the individual or individuals concerned, with the funds going to the firm when a claim is made. Keyperson insurance uses critical illness cover – which pays a lump sum on diagnosis of one of around 30 or more life-threatening conditions – or life insurance. Cost will depend on the type of cover and the individual’s age and health, but it need not be expensive and is a proven and reliable way to generate cash at a time when it is needed most. Is there someone in your business who is essential to ensuring your business targets are met? If so, talk to us now about your options.
Notes on using this fact sheet: This fact sheet is published solely to provide information and it does not constitute advice or a personal recommendation. Always take detailed financial advice from a suitably qualified individual before making important financial decisions.
