Partnership assurance can now be written on a group life basis: This can have several advantages:
- Cost group rates are cheaper than individual rates
- Equity – premiums are shared equally between partners rather than penalising older partners
- Free cover limit – sometimes it is possible to get partners through who might not pass individual underwriting
- Administration – one plan is easier to control and administer than many
- Premiums can usually qualify for tax relief
- Benefits under the lifetime allowance for pension relief are paid tax free
If a partner dies. Where there were two or several there is now one less. Those in the business now have to do more work, probably for less money. The sick partner or the deceased partner’s family is checking up to make sure they get their share of the profits. Telling the survivors how to run the business…
If there is no partnership insurance there is a problem.
What was once a dream has become a nightmare…yet it need not have happened. Partnership insurance solve problem.
A business can be insured against the loss of a key person such a plan can ensure the survival of the business. But how does a sick partner or a deceased partner’s estate get their money out? Taking the cash out of a business that has just lost a key player might well kill it completely; so transfer the risk to an insurance company with partnership assurance.
Partnership insurance is a plan written on the life of each partner and placed into trust. In the event of the death or illness or a partner the plan proceeds are paid out to the trustees who would normally be the surviving business partners. They then use the money to buy the deceased partner’s share of the business from his estate. The survivors thus then own 100% of the business and the deceased or sick partner’s family has extracted its cash – without putting any strain on the firm.
It has to be done carefully to avoid any IHT liability but expert advice can put the right money, in the right hands, at the right time and with no tax to pay.
Contact Us for further information.