Life Assurance and Critical Illness
Life Assurance and Critical Illness
Lump sums payable on diagnosis of Cancer, Stroke, Heart Attack and a wide range of other conditions, are an increasingly valuable employee benefit. This type of cover is normally very cost effective and easy to underwrite when sourced on a group basis.
What's the risk?
1 in 4 men will contract a critical illness before the age of 65. For women the figure is 1 in every 5. As a result of advances in medical technology, people now survive longer, which is when the benefit of Critical Illness Protection is appreciated.
What is Critical Illness Protection?
Critical Illness Protection is designed to pay you the benefit while you are still alive. Sometimes called "Living Assurance", it pays a capital sum or a tax-free monthly income on diagnosis of a defined Critical Illness. Your business will normally be insured against risks to buildings or equipment, the risk to your business through critical illness or the death of you or your employees can be much more significant.
With the proper protection, your business could survive even the worst crisis. Life and Critical Illness Protection is well suited for protecting the following:
1. Loss of a Key Person
The Risk: Depending on the size of your company, there could be various people whose loss through illness or death could pose a serious threat to profitability, such as the managing directors, partners, business owners, or sales and marketing managers.
The Solution: A critical illness and/or life policy taken out by the company on the life of a key person can pay out a lump sum to the company. This could protect the company against the loss of profits or give time to reorganise the company, recruit and train new people, find new clients or offset the effects of lost sales.
2. Loss of a Shareholder / Partner
The Risk: If a shareholder or partner were to become critically ill or die, they or their family might have to sell out in order to realise their share of the business. They might sell out to the opposition or wish to be involved in the business.
The Solution: The main shareholders or partners can take out protection designed to pay an amount equal to their share of the business. These policies are written under a business trust with the other shareholders or partners as beneficiaries. This enables their beneficiaries to take up an option to sell their shares to the others and have the resources to buy them.
