Many business partnerships are based on years of collaboration, mutual support and friendship. The death of a partner can be an extremely distressing and traumatic experience for those involved. As well as that, this unfortunate event might jeopardize the financial security and stability of the partnership. The remaining partners may be obliged to pay a capital sum to compensate the deceased estate for his/her stake in the partnership. Partnership Insurance can release the funds to make this possible, and allow the partnership to continue without the involvement of next of kin.
What is Partnership Insurance?
This is a specific kind of life insurance that can provide compensation to a business partnership. If one of the partners dies a lump sum will be released, allowing the deceased person's share of the partnership to be bought from their next-of-kin.
How does it work?
Before taking our a Partnership Insurance Policy, the assistance of legal and taxation advisors needs to be sought. The premium that is paid on a regular basis during the term of the policy will be dependent on a number of different factors, such as the value of partnership etc. If the unexpected happens and a partner dies, the policy will provide a lump sum to compensate for this event.
- Financial Stability: Gives surviving partners the funds to repay the deceased 's estate.
- Ease and Choice: The deceased's successor is not obliged to become involved in the business.
- Peace of Mind: Partners have the security of knowing they can retain control of their affairs.
- Flexibility: This insurance plan can be tailored to include serious illness cover.
Who is Partnership Insurance for?
Partnership Insurance can be taken out by members of a business partnership of any kind. In the event of the death of one of the partners, it will provide funds to allow for the purchase of the deceased's share of the partnership from next-of-kin.
Why take out Partnership Insurance?
The death of a partner may bring financial and legal problems for a business partnership. The remaining partners could be legally obliged to pay an immediate capital sum to the deceased's estate. This money may need to cover a range of different costs such as undrawn profits, any share of partnership fixed assets, the balance of the deceased's capital. The partnership may be under financial pressure to provide the deceased partner's next of kin what is owed to them. Partnership Insurance will provide the necessary funds to pay the deceased partner's estate for their share of the partnership.
Other ways to protect your business
Zurich Life can offer your business several other ways to safeguard its people and interests, as well as Partnership Insurance. Key Person Insurance, Co-director Insurance and Corporate Co-director 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.