As an employer and business owner, it’s your responsibility to safeguard your employees’ wellbeing. Usually, this goes further than just providing adequate compensation and safe, conducive working conditions. A good business manager peeks into the future and plans for the worst case scenario.
Taking out business life insurance cover for your employees is a great way to ensure that their loved ones are protected should anything unexpected happen. Knowing that the future is secured helps give your staff peace of mind, whilst allowing them to focus on the tasks at hand.
That said, a business life insurance cover protects your business too. Depending on the plan you choose to take out, you could use it to protect your company from financial risks, debt, loss of earnings and more. You may also use the policy to provide benefits for employees who passed away while in service, or protect your business from collapsing should you or another key person depart.
In this article, we take a look at different life policy policies available for your business, and how to go about taking out the most suitable ones.
What Is Business Life Insurance?
Business life insurance is a collective term for various insurance policies meant to protect your business from financial hardship as a result of losing a manager or employee. These policies also offer benefits to members of staff.
When it comes to these policies, it’s the onus of the business to take out the policy and cover the premiums. In the event that risk occurs, the pay-out may either go to the business or the individual’s family and dependents.
What Types of Business Life Insurance Policies Are Available?
As we’ve mentioned, there are several different policies that fall under business life insurance, all tailored to cover specific aspects of the business or employees. When taking out a life insurance policy for your business, you need to ensure that you’re paying for the policy that best suits your needs.
The following are five common policies you can choose from.
Key Person Insurance
This is a popular form of business life insurance that a company takes out on the life of a proprietor, top executive or other crucial individual. The cover is intended to protect business from the potential disruption that losing these key figures could cause. Since it’s the business’ responsibility to pay the premiums, it remains the beneficiary of the policy.
Relevant Life Insurance
Relevant life insurance is a business insurance policy a company takes out collectively for its employees. This cover acts as employees’ life insurance cover, and pays out benefits to the loved ones should they lose their life while still working for a company.
Taking out a relevant life insurance policy for your employees demonstrates your value for them, their wellbeing, and financial security. Indeed, it is an excellent way to attract and retain the right staff and keep employee turnover low.
Business Loan Protection
Your business may be doing well now, but there’s no telling what the future holds. This is why you should take out an insurance policy on your business loans.
Business loan protection insurance helps avail funds to settle a loan, commercial mortgage, or owner’s loan if they fall critically ill or pass away. It provides the much-needed cushion during financial hardships, and ensures your business is able to repay loans even during such times.
Shareholder Protection
Shareholder protection is a business life insurance policy designed to ensure businesses have a succession plan. This policy serves to make sure a shareholder’s shares remain in the business when they pass away ? while their families are duly compensated.
Shareholder protection essentially allows the business to buy shares back from someone who’s been diagnosed with a critical illness or has passed away. This makes it easier for the company to retain ownership and thus remain in control while minimising disruptions.
Employee Benefits
An employee benefits insurance plan is a life policy offered by employers to their employees. This type of insurance is often a group insurance plan. Employee benefits offer a great way to attract and retain new employees in your company.
Choosing the right business life insurance
There is no shortage of insurance policies in the market today. Unfortunately, not all are created equal. With this in mind, how do you ensure that the plan you’re about to take out best suits your needs?
To pick out the best insurance policy, analyse the risks your business is exposed to and the situations in which it is likely to suffer. Whether your priority is to protect your business or safeguard your employees, having a business life insurance plan is a must-have in 2022.
