Our guide to Business Life Insurance helps customers understand which policy will suit them and their business. We look into Key Man Insurance, Relevant Life Cover, Partnership Protection and Shareholder Protection to help you work out if you're eligible, what benefits you can get from the policy and how it can help protect you, your business and your employees. With Business Cover Expert, we help to advise and guide you on the best life insurance policies for your business. We make sure you get a tailored policy to suit your exact requirements.

1. BUSINESS LIFE INSURANCE: A GUIDE

2. BUSIESS LIFE INSURANCE: A GUIDE

3. SOLE TRADER
TAX EFFICIENT
ATTRACT STAFF
TRUSTEE
RELEVANT LIFE COVER
PARTNERSHIP
CHARITY
LIMITED LIABILITY PARTNERSHIP
LIMITED COMPANY
Who can apply?
Relevant Life Cover is a tax-efficient way for an employer to provide
a death-in-service benefit for an employee.
Relevant Life Policies are written on an individual life basis on the life
of an employee. The premiums are paid by the employer, but the
beneficiary of the employee receives a lump sum if the employee dies
whilst employed or is diagnosed with a terminal illness.
As the employer pays the premiums, both the company and the
employee can experience tax relief. The employee does not
have to pay any income tax on the policy. There are no national
insurance contributions to pay for either party and the policy
payments are not taxed as a benefit in kind. The employer also
benefits from corporation tax relief.
A Relevant Life Policy is a great employee benefit and can
help to attract and retain loyal, high-calibre employees.
PEACE OF MIND
The policy is not included in the employee’s estate for inheritance
tax benefits, nor is it included in the lifetime pension allowances,
giving an added peace of mind to employees and their family.
A Relevant Life Plan must be written in a
discretionary trust where the employee’s family
and dependents are normally beneficiaries.

4. RELEVANT LIFE COVER: KEY FEATURES
Guaranteed premiums are paid
monthly by the business
All premiums and benefits qualify from
income tax, national insurance and
corporation tax relief
Benefits are usually free from
inheritance tax
Must be written into a
discretionary trust
A great tool in
recruitment and retention
Pays out a lump sum to the
employee’s beneficiaries
A single-life policy whilst the
employee remains with the company
Protects the lifestyle of the
employee’s family

5. KEY MAN INSURANCE
Key Man Insurance, also known as Key Person Cover, is designed
to provide financial protection to a business against the death of an
employee or director who is key to the success of the business.
SALES MANAGER
IT SPECIALIST
MARKETING
MANAGER
MANAGING
DIRECTOR
CHAIRMAN
WHO IS A KEY MAN?
HOW DOES IT WORK?
The policy is taken out by a business on the life of a key employee.
When that employee dies or suffers from a critical illness, the policy
pays out a lump sum to the business. The business can then use
these funds to cover the costs of losing the key employee. Such as:
Most small and medium sized businesses will have one or more
employees who are crucial to their continued success.
46%
of BUSINESSES
stated they would FOLD
if a key person
died or suffered a critical illness.
(Legal and General 2016)
In fact,
RECRUITING
AND
TRAINING
TEMPORARY
COVER
LOSS OF
PROFIT
LOSS OF
REPUTATION
OR
CUSTOMERS
MEETING
LOAN
REPAYMENTS
PAYING AN
EXISTING
LOAN
DIFFICULTIES
GAINING
INVESTMENT
ABSENCE IN
KNOWLEDGE
OF
PROCESSES

6. KEY MAN INSURANCE
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With Key Man Insurance the business pays the premiums, rather
than the employer. The business also receives the financial pay-out
when a claim is made.
If a critical illness will have the same detrimental effect on the
business as the death of a key person, cover can also be provided.
If a key person within the business leaves before the end of
the policy, the business can:
WHAT HAPPENS WHEN AN EMPLOYEE LEAVES?
CRITICAL ILLNESS
Critical illness can cover anything including a heart attack, stroke or
cancer.
SOLE
TRADER
LIMITED
COMPANY
CHARITY
It is suitable for all sizes of business, including sole traders. These
types of cover do not need to be written in a trust, however, the
business must be able to demonstrate that it will suffer a financial
loss as a result of death, terminal illness or critical illness of that
employee.
Stop paying the premiums to end the policy or continue to
pay the premiums until the end of the term and in the event
of a claim still receive a lump sum.
Transfer the policy to the key person who
would then need to continue paying the
premiums, but would become the legal owner
of the policy.
OR
PARTNERSHIP

7. SHAREHOLDER PROTECTION
Shareholder Protection provides the business with a
lump sum in the event of a death of a shareholder. It
enables the company to purchase the shares of the
relevant business co-owner. The policy is designed
to make sure that in the event of a shareholder’s
death, the share exchange is as smooth and stress-
free as possible.
AN UNEXPECTED EVENT
of BUSINESSES
don’t have Shareholder Protection
cover in place
(Legal and General 2016)
37%
Without Shareholder Protection, an unexpected death of a shareholder could have a
detrimental impact of the business and its structure. Normally, the shares would go into
the deceased estate rather than back into the business. An unexpected event could lead
to:
Shareholder protection helps to ensure that you retain
control. It provides the funds to help purchase the
shares, rather than having to draw on funds set aside
for other purposes.
Attraction from competitors
and the poaching of key staff
The need to raise capital to buy
shares if the spouse decides to
sell
Ensuring the spouse receives
a fair price for the shares
The introduction of an
unsuitable buyer of the shares
Attempting to stop the shares
falling to the deceased estate
Unfavourable prospects of the
spouse keeping the shares
Any impact on the confidence
and productivity of employees
CAN YOU AFFORD TO BUY OUT A
SHAREHOLDERS SHARE IF THEY DIED?
It also prevents the sales of shares to hostile parties
or competitors, which helps to maintain business
stability during a period of change.

8. SHAREHOLDER PROTECTION BENEFITS
STABLE BUSINESS PLAN
STRESS-FREE PROCESS
SUPPORT FOR FAMILY MEMBERS
WEIGHT OFF YOUR MINDPEACE OF MIND
When a shareholder passes away,
they don’t have to worry about
finding the money to purchase the
assets and the business can return
to normal as quickly as possible.
Inheriting family members don’t always
know how to manage or leverage
shares and assets. In most cases,
money may be more useful after losing
a member of the family and can help to
take some pressure off financially.
Shareholder Protection can help to relieve
stress when losing a key breadwinner. With
this policy, families receive financial
compensation in the case of their death. This
means they can receive a fair buy-out price, as
well as a having stress-free and easy process.
Shareholder Protection can also cover
serious illnesses and disability. In these
instances, insurance can be a big weight
off an employee’s mind as well as giving
peace of mind to the employer so that
any illness of an owner is not detrimental
to the business.

9. PARTNERSHIP PROTECTION
WITHOUT COVER
Partnership Protection pays out a lump sum to assist the remaining
partner(s) should anything happen such as death or serious illness.
This enables the remaining partner(s) to purchase the deceased’s
share of the business.
Without Partnership Protection, if a
partner were to die the share would fall
into the deceased estate and may be
inherited by the spouse or partner. This
may be unsuitable for the surviving
business partners and it may not provide
for the deceased’s spouse or family
financially if they decide to sell.
Raising capital to fund the acquisition
could be disruptive to the business and
may prevent funds being spent
elsewhere.
PROTECTING YOU AND THE FAMILY
Partnership Protection covers the ongoing operations of the company
whilst also looking after the deceased’s family. It ensures they receive
a fair price for their proportion of the business and gives back control
to the remaining partners.
Equally, a partner who is diagnosed with a serious illness may want to
retain the option of continuing in the business or be compensated if
they choose to leave.
Buy-out a partner’s interest in the business
Pay off an outstanding loan
Regain control should a partner die or fall ill
Establish agreements and trusts to protect the business
Protect against hostile or uninterested inheritors
Avoid the sale of assets
Retain confidence of employees and customers
PARTNERSHIP
PROTECTION

10. BUSINESS LIFE INSURANCE 89%of BUSINESSES
that have PROTECTION COVER
took it out after taking or seeking advice
to protect their business
Despite this ,
In 2015, there were a record 5.4 million private sector businesses
in the UK, which was a 55% increase since 2000. The total
employment in SMEs was 15.6 million and the combined turnover
was £1.8 trillion.
1in10SMEs
don’t have
Business Life Insurance
(Quote.com, 2017)
Small or medium sized companies account for around 99% of
businesses within the private sector.
In 2016, there were 1.3 million employing businesses and 4.2
million non-employing businesses. Therefore, 76% of businesses
did not employ anyone aside from the owner.
95%of BUSINESSES
are micro-businesses
Employing 0-9 people
Business Life Insurance is important in keeping your business, your employees and their families
protected against unexpected events. Learning about the relevant policies and what’s best for your
business is integral in the long-term success of your business. At Business Cover Expert, we help
provide advice and guidance on finding the best policy for you to keep you and your business
protected.
PROTECTING YOUR BUSINESS
Sources: Legal and General, 2017, Department for Business Energy and Industrial Strategy, 2016

11. BUSINESS COVER EXPERT
Our team of specialist business advisors have in-depth
knowledge of the industry and the best products on the market.
We work with all types of businesses to make sure that we get
the right cover that suits you.
Business Cover Expert was established to provide advice and
guidance to organisations and businesses to protect themselves,
their shareholders and their managers from the financial impact of
the loss of key members of staff.
We’ll not only help you to understand what products will help to
protect your business, but also ensure that you can continue to
operate smoothly as a business should an unexpected event of
death occur. We tailor the amount and length of policy to your
exact business needs so that you can get the protection that’s
right for you.
WHAT WE DO
We offer advice on business insurance products including
Relevant Life Cover, Key Man Insurance, Shareholder Protection
and Partnership Protection so you can get the right protection for
your business. We provide a range of options that can offer full
cover should the worst happen, such as losing a critical member of
staff or shareholder.
0800 802 1793
info@businesscoverexpert.com
www.businesscoverexpert.com
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