Reduce risk and protect your business, so you can continue to focus on growth
Running a successful business can be challenging, and you can often not predict what will happen next. Thriving companies often owe their success to key individuals who spearhead change and drive the business towards its long-term goals. Losing these individuals to illness or death can be devastating - not only for the families involved but for the business as a whole.
Employee benefits such as Relevant Life Insurance, Share and Partnership Protection, Key Person Insurance, and Executive Income Protection can provide peace of mind and help protect your business from unforeseen circumstances, allowing you to focus on growing your business.
In this article, we take a quick look at these benefits, before digging deeper into how each one can help you reduce financial risk.
Relevant Life Insurance Policy
Relevant Life Insurance is a type of life insurance that provides a tax-efficient way for employers to offer death-in-service benefits to their employees. This benefit pays a tax-free lump sum to the employee's beneficiaries if they die while employed by the business.
How does it help?
Offering Relevant Life Insurance can help attract and retain top talent for many reasons. To begin with, it demonstrates that you care about your employees' welfare and so helps build a strong relationship between you and your team.
But more importantly, it also provides a deep sense of financial security, as employees know that their loved ones would be taken care of if the worst should happen. That security is hard to give up, and this benefit can help to keep the best talent in post for longer.
Although not strictly a benefit that directly reduces the risk for your company (as it really is about reducing risk for your team), Relevant Life Insurance does contribute to the long-term success of your business. A high turnover of staff can really hinder a company’s progress, as onboarding new staff to fill key roles can take a long time.
In fact, one estimate says that it can take between 1 to 2 years for a new colleague to work at optimum efficiency. That’s a long time to be waiting to push your business forward. Keeping hold of good people is far more cost and time efficient.
Relevant Life Insurance works as a powerful incentive to remain in post, keeping your team intact and giving your business the best chance of growth.
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Shareholder protection insurance and partnership protection
Share and Partnership Protection insurance is a policy designed to provide financial security to business owners and their families in the event of the death or critical illness of a shareholder or partner. If a shareholder or partner dies, their share of the business would typically pass to their beneficiaries, who may not have the knowledge or expertise to run the business effectively. This could lead to the business failing or the other shareholders or partners having to buy out the deceased's share.
How does it help?
Share and Partnership Protection insurance provides a lump sum that can be used to buy out the deceased's share, ensuring the continuity of the business. It reduces the risk of an inexperienced shareholder having a say in business decisions and potentially damaging business growth.
This benefit is essential for those who want to ensure that their business grows, no matter what.
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Key Person Insurance Policy
Key Person Insurance is another type of life insurance policy that businesses can use to protect themselves. Key Person Insurance provides a lump sum to the business if a key employee, such as a director or senior manager, dies or by adding critical illness cover to protect against the risk of serious illness such as cancer, heart attack or stroke.
How does it help?
Losing a key person can have a significant impact on a business's operations and financial performance. Some people are so integral to the wellbeing of a company that they are hard to replace. This can be particularly true of Founders, Directors or senior staff. Without quickly filling the gaping hole that they leave behind, a company can lose drive, and direction, and ultimately flounder.
Key Person Insurance can provide financial support to help the business recover from the loss of a key employee, giving it the funds to hire a replacement. This ensures your company can stay on track and continue to thrive.
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Executive Income Protection Insurance
Executive Income Protection is a policy that provides financial support to senior employees if they are unable to work due to illness or injury. This benefit offers protection to the senior employee, as well as the company.
Those running the company - those who are directing and driving progress - are often crucial to the long-term success of the business. Losing these key people can be a devastating blow and hinder a company’s ability to grow. This benefit can help retain key employees, as it provides them with peace of mind knowing that their income will be protected if they are unable to work. This promise of financial security is not easily given up, and this benefit can help keep senior employees in post for longer.
Executive Income Protection can also help the business by providing funds to cover the cost of a replacement or recruitment costs whilst the executive is recovering. This allows the business to continue to thrive whilst they are recovering.
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Reduce risk and focus on growth
Business owners must take steps to protect their businesses from potential financial risks. Employee benefits such as Relevant Life Insurance, Share and Partnership Protection, Key Person Insurance, and Executive Income Protection can provide financial security to your business and employees. By offering these benefits, you can retain top talent and focus on growing your business regardless of what happens to key individuals.
