It goes without saying, that the untimely death of a business owner is hugely traumatic for their family, but it will also affect those connected with the business.
One of the financial implications may be that the owner’s widow, widower or other beneficiaries inherits the shares but may have an immediate need for money, while the surviving shareholders may want to buy the shares but might not have sufficient funds available.
The combination of a suitable agreement and the correct insurance will give peace of mind.
Business protection with critical illness pays out a lump sum when an insured person is diagnosed with a terminal illness; a specified critical illness; or dies during the term of the cover. This payout affords business owner(s) to buy the insured’s shareholding interest in the firm (using the appropriate option agreement) and retain control over the running of the business.
Having a suitable agreement is the first step, but insurance may also be needed to provide funds for the share purchase.
The combination of a suitable agreement and the correct insurance will give peace of mind that, should the worst happen, the continuing shareholder would have funds to help buy the shares and the deceased’s family will receive appropriate and prompt financial compensation.
For further information on shareholder protection and other financial services, please contact Gary Nixon on 01274 465557 or email email@example.com.