Business Protection

Death in Service

Death in Service is a life insurance policy, often attached to a company pension scheme, whereby members are covered for around three or four times their salary should they die while employed by the company. The cost of the policy is born by the employer. There is no (or limited) underwriting required and the tax-free lump sum would be paid to the member’s nominated beneficiaries. Death in Service is a fairly cost-effective employee benefit. However contributions come under pension regulations so they would form part of an individual’s Lifetime Allowance.

Income Protection

Also known as accident, sickness and unemployment cover, Income Protection Insurance provides a regular income, up to retirement age, if an employee becomes unable to work as a result of accident, sickness or disability. The amount paid out is linked to his/her overall level of income and is usually capped at around two thirds of salary. After a period of statutory sick pay, there is usually a short waiting period for the Income Protection benefit to start.

Critical Illness Cover

Critical illness cover is an insurance policy that covers the insured against specified critical illnesses such as cancer, heart attack, multiple sclerosis, etc. If the insured contracts one of the specified illnesses, the insurers would pay a lump sum rather than an income, as in the case of permanent health insurance. Critical illness is expensive for companies and is usually only offered to key senior employees.

Key Man Assurance/Protection

Key man assurance is an insurance policy taken out by a business to compensate that business for any financial losses arising from the death or extended incapacity of one of the company’s key employees and/or directors. A lump sum is paid to the business directly. Generally, it is taken out to cover the death of a key employee or director and is no more expensive than personal cover. Critical illness cover can be included at an additional cost.

Shareholder Protection

Shareholder protection is an insurance policy taken out to protect a company’s shareholders. This policy will pay out a lump sum upon a shareholder’s death to allow all the remaining shareholders to purchase the remaining shares and avoid any non-suitable persons from inheriting or buying the shares.

Private Medical/Health Insurance

While the National Health Service provides free healthcare for UK residents many people like to buy private medical insurance to cover the cost of private treatment. Many companies offer private medical insurance as an employee benefit. However if your company provides ‘free’ medical insurance, you will have to pay tax on that benefit. HM Revenue & Customs (HMRC) will usually include the value of the benefit in your tax code so that they can collect the tax due through PAYE (Pay As You Earn).