The directors of a company are often the major shareholders and key decision-makers within a firm. A successful business depends on the co-operation and experience of its directors. If one of these directors becomes seriously ill or dies it can create great difficulty for surviving directors and the deceased's successor(s) alike. Corporate Co-Director Insurance gives the company the security that there will be funds available to buy back shares should this happen.
What is Corporate Co-director Insurance?
This is a business-specific life insurance that can provide compensation to a company if one of the directors of the firm dies. If this unfortunate event occurs, a lump sum will be released, allowing the deceased person's shares to be bought from their next-of-kin, in the company's name.
How does it work?
There are both legislative and taxation issues that need to be examined to ensure that a Corporate Co-Director Insurance arrangement is appropriate. So, any company seeking to acquire this kind of business protection will require the assistance of legal and taxation advisors. The premium that is paid on a regular basis during the terms of the policy will be dependent on a number of different factors, such as the value of the shares that the director holds, the company's turnover etc. If the unexpected happens and this director dies, the policy will provide a lump sum to compensate for this event.
- Stability: The company can retain control of its affairs, by buying out the deceased director's shares.
- Ease and Choice: The deceased's successor is not obliged to become involved in the business.
- Peace of Mind: Company have security of knowing they will not be obliged to relinquish a majority shareholding.
- Flexibility: This insurance plan can be tailored to include serious illness cover.
Who is Corporate Co-director Insurance for?
Corporate Co-director Insurance can be taken out by a company of any size. It will provide funds to allow for the purchase of the shares from next-of-kin, in the event of the death of one of the directors.
Why take out Corporate
The death of a director may bring distress and grief to any organisation. As well as that, it could jeopardize the security and direction of the company. If the deceased director was a majority stakeholder, the company may lose control of its affairs if next-of-kin were to take over. The deceased's family may be unfamiliar with the business, and may have cash-flow problems after losing his/her income. Co-Director Insurance makes it possible for the company to buy the shares from the family, which could be the best option for all concerned.
Other ways to protect your business
Zurich Life can offer your business several other ways to safeguard its people and interests, as well as Corporate Co-Director Insurance. Key Person Insurance, Co-director Insurance and Partnership Insurance are just some of the plans we offer. Our advisors are on hand to talk you through your options and to help you choose the right plans for your business. Find an advisor in your area, or call us directly at 1850 804 164.