The document discusses protecting a business's legacy by insuring against risks associated with the death or illness of key employees or business owners. It outlines different types of business protection policies like key person insurance to cover lost profits if someone dies, and shareholder protection policies to help remaining owners buy shares from a deceased owner's estate. The document also presents options for relevant life plans that provide tax benefits compared to standard life insurance plans. It encourages businesses to review their protection needs and consider low-cost solutions like relevant life plans.

1. The Business Journey
4 November 2014
@TheBusJourney #SMEJourney

2. Sam
Henderson
@TheBusJourney #SMEJourney

3. “Protecting your Company’s Legacy”
Sam Henderson
Chartered Financial Planner
Henderson Stone & Co Ltd
Henderson Stone & Co Ltd is an appointed representative of
Caerus Financial Ltd.
McCafferty House, 99 Firhill Road, Glasgow G20 7BE
www.hendersonstone.co.uk
samh@hendersonstone.co.uk
Mobile : 07710 520307

4. OUR
RESEARCH
WITH
BUSINESSES.
Legal & General’s role is to provide a generic
view on the matters discussed in this
presentation and our input should not be taken to
be,or relied upon, as personal financial advice.

5. Business Journey
• May 2013 Lifestyle Financial Planning
• Feb 2014 Auto Enrolment
• Nov 2014 Business Protection

6. Life Expectancy – At Birth
Pensions Issue?
Age
Male Female
1908 1st State Pension
(Means Tested – 5 Shillings pw)
49 53
1948 State Pension
(Everyone – £1 + 6 Shillings pw)
66 71
2014 State Pension
(Basic £113.10 + Pensions Credit)
78 82
2014 Life Expectancy
(When Age 65 is Achieved)
86 89

7. Death Before State Pension Age
Number of Partners Chance
1 13%
2 25%
3 33%
4 40%
5 50%
Consequences?

8. Most Impact on your Business?
1% Business Premises Broken Into
10% A Major Contract is Lost
23% Business Premises Damaged by Fire
61% Business Owner/Key Employee
Dies/Critical Illness

9. Business Legacy Issues
• Key Person – Profit Protection
• Business Loan Protection
•Share Owners Protection

10. Business Legacy Issues
• Key Person – Profit Protection
The policy proceeds are paid directly to the business to be used
to help replace a Key Person and cover the loss of profits that
may occur. The policy proceeds could help the business to
continue trading

11. Business Legacy Issues
• Business Loan Protection
The policy proceeds are used to help pay off any
outstanding loans the business may have.

12. Business Legacy Issues
• Share Owners Protection
On the death of a business owner, the policy proceeds
are paid to the remaining owners to buy the share of the
business from the deceased’s estate.

13. Relevant Life Plan
• For any employee, including a Director
• Designed to provide lump sums on death for an employee’s family
Who Would Want One?
• You as an Employer – Death in Service benefits for employees – if too small for Group
Scheme.
• You as a Director – To provide you own Death in Service benefits.
• You as a High Earner – Where Death in Service benefit is tax efficient as it is not within
Pension Lifetime Allowance (£1.25m)

14. Cost Comparisons
Non-Relevant
Life Plan Policy
Relevant
Life Plan
Premium £1,000 pm £1,000 pm
Employee
Tax
National Insurance Contribution
(Assuming 2%)
£34.48 --
Income Tax (Assuming 40%) £689.65 --
Employer
Tax
National Insurance Contribution
(Assuming 13.8%)
£237.93 --
Less Corporation Tax (Assuming 20%) -£392.41 -£200
Total Cost £1,569.65 £800
A saving of £769.95, which is a saving of almost 50%

15. Questions?
• When did you last review the Articles of Association for
your Limited Company?
• When did you last assess the consequences of a death in
your business?
• Have you got your Auto Enrolment Plan finalised?

16. “Protecting your Company’s Legacy”
Sam Henderson
Chartered Financial Planner
Henderson Stone & Co Ltd
McCafferty House, 99 Firhill Road, Glasgow G20 7BE
www.hendersonstone.co.uk
samh@hendersonstone.co.uk
Mobile : 07710 520307

17. Questions for Sam?
@TheBusJourney #SMEJourney