Key Person
Most businesses would agree that their people are their most important asset. Of these some will be vital to the business profits and in the event of their death or inability to work due to serious ill health there will be a major financial impact to the business.
The key people within your business may be the key income providers, a significant shareholder, a technical expert or any one who, if not around, would impact upon your profitability or sales.
Life Cover
In it’s simplest form a low cost policy would provide a pre agreed lump sum on the death of the key person within the period of cover. Typically the policy would be arranged using a 5 year renewable term assurance policy. This provides guaranteed insurability and the option to renew the cover for a further period. Premiums are paid by the business and in the event of death of the individual all proceeds are paid to the business which can be used to plug the gap in profits, fund finding their replacement or used in another way to suit the business.
Critical Illness Cover
Statistically you are more likely to fall victim of a critical illness than die during your time at work. Cancer Research UK estimates that 1 in 3 people will develop some form of Cancer during their lifetime and The British Heart Foundation states that around 1.3 million people in the UK have had a heart attack and approximately 2 million people are suffering from angina, the most common form of Coronary Heart Disease.
Businesses can suffer the same problems if a key person is unable to work due to a serious illness such as cancer, heart attack or stroke as they would if the person died. Critical illness cover can be combined with life cover and will pay out a lump sum on diagnosis of a range of critical illnesses or on death which ever happens first.
Income Protection
Income protection can provide a monthly income to the business during periods of long term sickness. Long term employee absence can take a heavy toll on a company's productivity, and consequently its bottom line. In addition to bearing the basic costs of the employee's salary and temporary cover, the employer may be required to adapt the workplace, implement a positive rehabilitation strategy and operate a policy of support for employees who have become incapacitated - so the initial cost of an absence can become substantial.
In 2006, sick leave and absenteeism cost UK industry:
• £13.4 billion*
• 175 million working days*
• an average of 7 sick days per employee*
Income protection can provide the business with insurance to meet these costs.
To receive further information and assistance on these or any other forms of protection contact Clear Financial Management on 0208 329 4900.
*Source: CBI absence and labour turnover survey 2007, Confederation of British Industry