How exposed are your client’s?
Are the businesses protected?
Is their level of protection enough?
Does this protection need reviewing?
What measures have been taken to safeguard the future of their business?
Loan protection Shareholder Protection Key person cover Relevant Life Plan
Many of your clients will be directors of limited companies and it’s highly likely that most of them will have some form of life insurance in place to protect their families and outstanding liabilities.
These directors will be paying for personal insurance plans from their net income, unbeknown to most it’s possible to get the same cover to be paid by their company, written in trust.
Providing they haven’t developed medical conditions or started smoking its likely the premiums will work out similar – the difference being that these are paid by the company before tax.
If you’re a director of your own limited company on PAYE, by taking out a relevant life plan they can gain significant cost savings and tax advantages on their personal cover.
- Policy is written in trust – making this tax efficient for IHT
- The Policy is paid by the company before Tax deductions
- Client can add anyone on the Payroll
- How exposed are your client’s?
- Are the businesses protected?
- Is their level of protection enough?
- Does this protection need reviewing?
- What measures have been taken to safeguard the future of their business?
Surprisingly, many businesses neglect to protect their most important resource: They may have insured their premises, equipment and stock, but what about the people who play the biggest part in their organisation’s success?
The impact of their loss could be significant. Profits could fall; loans may need to be repaid at short notice. At worst, the future of the business could come under threat.
Business Protection can help to eliminate these risks from the businesses.
A Business protection plan offers:
- Loan protection – allowing the business to pay off any outstanding loans should a shareholder or business partner die or become seriously ill.
- Shareholder Protection – enabling the business to retain control should a shareholder or partner die. Have the business shares been mentioned in a will?
- Key person cover – to protect profits if a business were to lose a key employee to death or long term illness.
These products can be tailored to suit each individual business. Startup’s may only require key person cover where established limited companies may need Loan and Shareholder protection.
Recently we wrote a policy for Mr Smith
- He was a higher rate tax payer paying £150pm from his net income for life cover, also had over 1m in assets so potential IHT issues.
- We rewrote the policy for the same amount; this is now paid by his company and written in trust for his children.
- The monthly savings and possible IHT savings made this worthwhile for the client
- This paid around 3600 in commission – 25% of which we paid to the accountants
Life cover on expenses only with a relevant life plan.
A Relevant Life Plan could result in savings for a business when compared with a typical life policy. Premiums could be reduced by up to 49% if you’re a higher rate taxpayer and up to 40% for a basic rate taxpayer.
It can also be way of providing valuable life cover and financial security for the employees, all in a tax efficient manner.
Why is this beneficial to your client?
It aims to protect your client’s businesses from unforeseen circumstances such as the impact of losing a key employee or the death of a shareholder.
- Relevant life cover can sidestep IHT buy placing the policy ‘in-trust’.
- Life cover can be provided to employees as a ‘death in service’ benefit, which may be an incentive join or remain with the business.
- Protection allows your clients to keep financial control of their business when unforeseen events occur, so that the business can continue to trade.
- The company as an expense pays relevant life cover.
Why Choose Bright Money Independent?
BMI is whole of the market therefore we have access to all providers, and are committed to providing an excellent, no fee based, advised service as well as on-going support and care.
We complete a full business fact-find to establish your clients’ current needs and possible future requirements to provide the best recommendation for their business.
Working closely with all protection Business Development Managers we keep up-to-date with any changes and new products to the market.
We have already partnered with some local accountancy firms to offer their client’s first class business protection and life assurance reviews.
Why is this of benefit to you?
- You will help your clients eliminate business risks.
- Depending on current circumstances you may improve tax efficiency.
- By providing an additional service to your clients it will stop them from going elsewhere.
- If you are not already providing this service, then someone else will be!
What’s in it for you?
We are paying introducer fees for all protection business. The greater the level of protection arranged, the greater the fee.
What should I do now?
Would you like to arrange a meeting with our protection advisers? They will be happy to meet, run through the process and help you to identify which clients may be suitable for a protection review.
Please contact Bright Money Independent.