Key Person Cover
Just as it is necessary to insure a business against the loss of or damage to physical assets, it is also vital to insure against the loss and/or against the serious illness/disability of a key person.
It is usual for the level of cover to be determined in one of three ways:
Key person salary x Sales turnover x Expected years to recover
Level term assurance, written on the life of a key employee enables funds to be made available to the business in the event of that person’s death to help in some of the following circumstances:
- Offsetting any reduction in profits;
- Prevent the business getting into financial difficulty;
- Employ a replacement; and
- Pay off a loan or overdraft to reduce the business’ liabilities.
Key Person Critical Illness Cover is designed to pay out a lump sum if a key person is unfortunate enough to suffer from any of the specified critical illnesses but survive for a period of time after diagnosis (normally 28 days). This, if paid out, enables funds to be made available to the business in the event of that person’s illness/disability to help in some of the following circumstances:
- Recruitment of a temporary or permanent replacement;
- Replace loss of profits arising from the serious illness of a key person;
- Tide the business over until the key person is able to return to work;
- Pay off a loan or overdraft to reduce the business liabilities; and
- Contribute to the medical care of the key person or provide financial support for their immediate family.
The minimum age to take out a life assurance contract is 18.
Loss of profits is the only type of key person assurance where premiums may be allowed as a trading expense for tax purposes, and for tax relief, a number of conditions need to be met.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £595.
The Financial Conduct Authority does not regulate most Buy to Let Mortgages.