How Life Insurance covers the loss of Keypersons, Partnerships and Surety's in Your Business.
The risk of being in business applies not only to trading for a profit, but also to the death or disability of partners or major shareholders, key members and benefit packages that attract and retain good staff. Business Insurance helps you identify, evaluate and deal with these risks, set up meaningful medical aid and pension benefits to create staff loyalty.
Has your company a Disaster Plan? Do you have a Strategic Contingency Plan in place? (This is extremely important for the Sole Proprietor).
The Sole Proprietor.
Your death or disability creates unique problems compared to other business entities. In most cases, you are the business and without you, it stops. How will your family then live?
Unless you have a certain arrangements to provide for them, they will be destitute! If your will does not state what you wish to happen to your business, it will be closed. What then?
Liquidate the business. But what about your family's income and your employees? The value you get, could be way less than expected. What about debts which will further reduce the value. And how will debts really be collected?
Bequeath it. Who will take over? With you gone, how will your employees feel? And your debtors and creditors? It's a fact that not many heirs succeed in such business ventures.
Sell it to a qualified employee. But where will they find the money to buy it?
cash to settle debts and offset any losses invariably caused by liquidation.
working capital whilst your heir learns the business, keeping your dependants, debtors and creditors happy.
the finance to enable the purchase of the business by a chosen employee.
Do you have any employees whose death or disability would have a negative financial impact on the business?
Have any of the business owners signed personal surety for loans that the business has been given?
Have the business owners made an arrangement about how to deal with each others interests in the business should one of them die or become disabled?
These risks are common to most businesses and the life cover solutions that we use to deal with them are:
1. Keyperson Insurance.
Life insurance that employers take out on the lives of key employees who contribute substantially to the success of the business. Should a key person die or become disabled, the business will receive the policy proceeds and use them to offset the loss that the untimely death or permanent disability has caused. It is an effective method of passing the financial risk that relates to the loss of key employees to the insurer. It therefore limits business risk.
2. Buy and Sell Insurance.
Life and disability insurance that business co-owners take out on each other's lives to enable them to buy a deceased or disabled co-owner's share in the business. An agreement that the various business co-owners enter into among themselves governs the policies. It provides a business with a plan that allows it to continue if one or more of the co-owners were to die or be disabled.
A binding buy-and-sell arrangement funded by a life policy is the only sound way of providing in advance for protection against an event which may disrupt the whole business, guaranteeing ready cash at the right time. In this way the survivors need not incur any extra commitments.
3. Contingent Liability insurance
Life and disability insurance that a business takes out on the life of an individual who stands surety for the debts of the business. Should the surety die or become disabled, the insurance policy will provide the funds that are necessary to repay the outstanding debt. This releases the surety's personal estate from this liability.
It serves two important functions:
It protects the company from any adverse effect on its credit worthiness as a result of the death or disability of the surety.
It protects the business owner's personal estate from any claims that may arise for any suretyship agreements that the business owner signed on behalf of the business.
You may use life insurance products that provide lump-sum benefits or products that are intended to replace lost income. Another important aspect of treating risk in a business insurance context, is the tax and estate duty treatment of the policies that are used to address the particular needs.
Structured correctly, business insurance policies can qualify for substantial tax concessions.
Staff Benefit Packages.
In today's competitive labour market, a well-designed and rewarding benefit package ensures that you attract and retain quality staff. Take care of your employees and they'll take care of you. In fact, a good benefit package can make or break a deal. A large number of people consider employee benefits a decisive factor when evaluating job opportunities.
Is your Pension or Provident Fund secure? More and more employers are expected to provide their employees with a plan whereby they can retire financially independent. Legislative requirements may soon make this mandatory for all employers.
Is your Medical Aid really effective? With so many schemes on offer and the current turmoil in this industry, you need professional advice to investigate a scheme that satisfies all levels in your company. I can help you select and implement plans that provide your members with the security they can best afford.
I offer an invaluable added service of coordinating the ongoing administration of any product, between your company and the product provider.
YOU NEED THIS INSURANCE REPORT!
Still not sure of what Business Insurance can offer you? For a limited period I will send you the REPORT, AT NO CHARGE OR OBLIGATION!
This unique report will;
Explain Business Insurance to you.
Help you decide what type of cover your business needs.
Help you decide how much cover you should buy.
Show you how to buy cover at the best rate available.
Decide if your current staff benefit strategy is worth what you are paying.
Show you the dangers you face if you don't address your business risk fully.
Get a free Business Insurance Quotation!
And much more...
Why would I give you this report? I have been in the insurance business for over 15 years and have seen the tremendous benefit that Business Insurances provide for companies that have lost their key persons or have suffered from high staff turnover. I have seen the huge difference that money has made to the company's profitability in times of crisis.
We are an independent brokerage of some 25 years standing and have been instrumental in the formulation of effective insurance packages for many companies both large and small.
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