Protecting your business protecting you. Why do I need business protection?

Transcription

1 Protecting your business protecting you Why do I need business protection?

2 As a business owner you know what you need to make your business a success. Suitable premises, machinery or tools, and your computer systems may all be important. But have you protected what is probably your most important asset your people? What you ll find inside 1. Protecting your key people, protecting your business 2. Loan protection 3. Ownership protection 4. Key person protection 5. Case study 6. A flexible plan 7. Changes you can make to your plan 8. Support for you, your family and your business 10. Support that really adds up 12. About Bright Grey

3 Protecting your key people Protecting your business How would you cope without your key people? As a business owner you do everything you can to make your business a success. You may consider the right premises, machinery or tools, or your computer system to be important. But have you protected what s probably your most important asset your people? People are important In most small and medium sized companies the success of the business depends on just one or two key people. If you ve worked with these people for many years it s easy to underestimate just how valuable they are, how much they know about the company, how many extra hours they put in. But we can never be sure what s around the corner. Sometimes, without warning, life throws the unthinkable at us. And that s why business protection is so important. You can t predict what will happen in the future, but you can make sure you have the right protection in place to keep your business afloat if a key person becomes critically ill or dies. What is business protection? It s an insurance contract that protects your business from the effects of key people being diagnosed with a critical illness or dying. You can use business protection to protect financial commitments as well as key people. Without the right business protection in place, you could end up risking everything you ve worked so hard to achieve. Types of business protection Loan protection insurance to make sure a loan is repaid on the death or critical illness of a key member of the business Ownership protection (or shareholder protection) insurance which gives the owners of the business a cash sum to buy the share of a co-owner who becomes critically ill or dies Key person protection insurance against the loss of profits that could result from the critical illness or death of a key person, by paying out a cash sum so the business can continue trading 74% of all our critical illness claims last year were for people of working age (60 and under). Source: Bright Grey claims statistics, 1 January 31 December,

4 Loan protection What is loan protection? One of the biggest challenges to the success of many businesses is finding the money to set up or expand. And if you re not fortunate enough to find someone willing to invest in your business, you may have to borrow to realise your plans. Quite often your ability to repay any borrowing again depends on one or two key people in your business. If these people were off work for a long time, sales might fall, customers may go elsewhere and profits could drop making the repayment of these debts very difficult. The pressure of trying to run your business and deal with mounting debts is likely to take its toll. With the right cover in place, if you or a key person were to die or be diagnosed with a critical illness you could: Repay loans Recruit a temporary or permanent replacement Train one of your other employees to step into the key person s shoes If you have protection in place to cover the loan, you re making sure that even if a key person suddenly becomes ill or dies, the loan will be paid off. And although you may think you have enough savings and investments to rely on, they re likely to run out more quickly than you d expect. 2 Why do I need business protection?

5 Ownership protection Who will control my business? Losing a partner, member or shareholding director can have a major impact on the success of any business. But it s not just about the loss of profit a business could suffer. Could your business continue if one of the owners were to die or suffer a critical illness? Who would take their place? Not only in performing their day-to-day duties, but in deciding how your business is run in the future? Security for your business Imagine if one of your co-owners were to die. Not only could your business suffer financially because they re no longer there, but what would happen to their share of the business? You could be forced to work with someone new, like one of their family members for example. That person may have no knowledge of your business and no interest in it either. But because they now own a share, they have just as much say as your co-owner had before they died. And if your co-owner suffers a critical illness this creates even more uncertainty. Will they be able to return to work and if so, when? Will they want to sell their share of the business, and who will buy it? By having ownership protection in place all of these problems can be solved. Business protection insurance gives you and your co-owners the security of being able to keep the ownership of the business in the hands of those who have built it. It also makes sure an owner who becomes ill, or the family of an owner who dies, receives a fair value for their share of the business. Have you considered what might happen if you or one of the owners of your business becomes critically ill or dies? They or their family might want to sell their share of the business. This could be to a competitor or some other unsuitable buyer. They could force the winding up of the business. Perhaps their family may wish to become involved in the business, which at best could be disruptive or at worst unacceptable to the other owners. The other owners may have to use funds they intended for other purposes to buy the share of the stricken owner. 3

6 Key person protection What is key person protection? There s nothing mysterious about key person cover. Put simply, it insures a business s key people in case they die, become critically ill or find themselves unable to work due to long-term sickness. The success of almost all small and medium sized businesses depends on a few people who make a significant contribution. So making sure the business is covered in the event of their death or serious illness is a fundamental step. What would happen to your business if you or another key person were unable to work due to illness or injury? Just some of the consequences of losing a key person: Sales could fall New products could be delayed It could rock the confidence of your lender, suppliers, customers and your other employees Loans may be called in Suppliers may demand payment up front Customers may choose to go elsewhere Without the leadership of you and/or your key person, your employees may decide it s time to move on Who are the key people? The key person may be you, the person whose vision created the business. It could be the sales manager, whose contacts and relationships with customers make sure that sales stay or target and the business is profitable. Often a person s value to your business is reflected in their remuneration package. So that s a good place to start when you re trying to identify your key people although this might not always be the case. The key people might be: Owner/proprietor Managing director Sales director Finance director Product designer Production manager Specialist staff Technical staff With key person protection you can either insure your key people and receive a lump sum, or you can choose Key Person Income Cover for Sickness which will pay you an income each month to cover the amount of profit the key person would have been bringing into the company. This will help you continue to pay the monthly loans, utility bills and every day running expenses. 4 Why do I need business protection?

7 Case study Howard Tighe is a self-employed businessman. He owns and manages a printing business in Durham. One morning in July 2004 he woke up with a strange numbness in his right arm. Within hours he was in hospital unable to move or speak. He had suffered a stroke. Added value at no extra cost Only a few months before, Howard realised that he needed to consider protecting his family in case the worst happened. His business was going well, but with a wife and two children to consider, he realised that there was no better time to think about protection. And he was glad he did The stroke affected Howard s speech, mobility and memory leaving him unable to manage his printing business for 12 months. The money Howard received from Bright Grey meant that he could concentrate on getting well again and not worry about his business. It also meant that his wife could leave her role in the business carrying out marketing, administration and accounts to help care for Howard in those early days. A Helping Hand On top of the financial payout, Howard received extra help from our Helping Hand service, which is available with every Bright Grey menu plan. Howard received a series of physiotherapy sessions to help him regain his mobility and improve his ability to work again. This service is available with every Bright Grey Business Protection Menu plan. You can benefit from counselling, a home visit from a specialist nurse, occupational therapy, support telephone calls or complementary therapy. Whatever help you need to get you back on your feet. I m sure I would not be where I am now if I hadn t had the extra help from Bright Grey. I don t think I would have been back at work again so quickly and the emotional impact on my family would have been far greater. Howard Tighe, plan owner 5

8 A flexible plan A protection plan that can change and grow with your business The business protection menu Bright Grey s Business Protection Menu offers a comprehensive range of covers providing financial benefits. The menu allows you to mix and match up to 10 covers within the same plan for different amounts and terms. And regardless of the number of covers you choose, you ll only have to fill out one application form, pay one plan charge and set up one direct debit. Your advisers will be able to talk you though which cover or combination would be best to suit your needs. Cover What this gives The options Life Cover Critical Illness Cover Life or Critical Illness Cover Income Cover for Sickness Key Person Income Cover for Sickness Payment Cover for Sickness Money if the person covered dies or becomes terminally ill Money if the person covered is diagnosed with one of a list of defined critical illnesses Money if the person covered dies, becomes terminally ill or is diagnosed with a critical illness, whichever happens first A monthly income if the person covered is unable to work because of sickness or injury during the term of the cover A monthly income if the key person covered is unable to work because of sickness or injury during the term of the cover Relief from making your plan payments if the person covered is unable to work because they re ill Single life Joint life first event Single life Joint life first event Single life Joint life first event Single life Single life Single life Joint life first event 6 Why do I need business protection?

9 Changes you can make to your plan Business protection that s flexible enough to change with you Changing your plan You can change a Bright Grey Business Protection Menu plan at any time. For example, as your profits grow or if you take out a larger business loan. These are some of the general changes you can ask to make to your plan at any time: Change from smoker to non-smoker rates Increase or reduce the amount of cover or term Change the way you make your payments Add or remove a cover Change between level, decreasing and increasing cover Add or remove a person covered Other changes We also include some options in your plan to increase the cover where we won t ask for any extra medial information. This makes it easily for you to quickly update your plan for situations like: An increase in the value of the key person An increase in your business mortgage or loan An increase in the value of a partner s or shareholding director s interest in the business You might not be able to make these changes on every cover, and for some we ll ask questions about the health of the person covered or ask for medical evidence. Some changes may increase or reduce your payments. 7

10 Support for you, your family and your business And you don t have to make a claim before you can use it It s about you, not just your finances We understand that your finances would only be part of your worries if you lost a key person. Who would replace them? How would you afford to find a replacement? How would you cope? Well, with every Bright Grey Business Protection Menu plan we offer you and your business an extra Helping Hand. We work with a company called RED ARC who will give you and your family the support of a personal nurse adviser. The nurse advisers can offer practical and emotional support, whenever, and for however long, it s needed. Helping Hand also gives much needed support to businesses enabling them to cope with the devastating commercial effects that critical illness and death can have. Support for employees and their families But the great thing about our Helping Hand service is that it also offers your key people and their families a whole range of practical and emotional support to help them though what can be one of the most devastating times of their lives. Helping Hand s personal nurse advisers can: Provide speech and language therapists Introduce a bereavement counsellor Give oncology nurse support Find a physiotherapist Provide cardiac rehabilitation support Source complementary therapies Help your client get back to work Advise on stress and depression If your business loses a key person, it s unlikely that you d have a substitutes bench to draw on for a replacement. Bright Grey s Helping Hand service can offer you that level of support. As well as providing a temporary replacement within 48 hours, Helping Hand can: Help the business recruit a full-time replacement Help write job specifications and adverts Give legal help, including advice on all aspects of employment law Provide access to a nurse adviser RED ARC Assured Ltd is an independent care advisory service and is not regulated by the Financial Conduct Authority. 8 Why do I need business protection?

11 ! Bright thinking: Help and support from the day your plan starts and you don t have to make a claim before you can use it. 9

12 Support that really adds up Individual support For death or terminal illness claims As soon as we re told about a claim we ll ask a RED ARC personal nurse adviser to make contact to see what help and support you need. This could involve different forms of assistance from contacting support groups to arranging help from a fully qualified and independent bereavement counsellor. For critical illness or income cover for sickness claims The nurse adviser will be able to offer immediate support from answering questions to giving professional medical advice. We can also arrange for a healthcare specialist to make a home visit. We will even pay for additional specialist treatment if the nurse adviser feels this will help. Whatever support you need, we ll do our best to help. If you have Income Cover for Sickness we can help you to get back to work. We work with a company called HCML, one of the UK s leading rehabilitation case management companies, to offer you the services of a personal rehabilitation case manager, who s matched to your particular needs. Career and job support In the case of illness it could be that you may need to find alternative employment. We offer access to career consultants, including a CV writing service and a comprehensive job seeker s manual. HCML is a rehabilitation case management service and is not regulated by the Financial Conduct Authority. 10 Why do I need business protection?

13 Business support Information about an employee s illness As the employer, you can also speak with a RED ARC nurse adviser to understand more about the illness an employee is suffering from, its symptoms, treatment and the likely impact on them and their family. By contacting RED ARC you ll be able to find out: What the treatment involves Any side effects of the treatment The impact on your employee s ability to work When a return to work would be likely What RED ARC is doing to help This service is designed to help the business deal with what will probably be an unfamiliar event. But, due to strict patient confidentiality rules the nurse adviser won t discuss the specifics of an individual employee s case. Recruitment solutions for temporary and permanent roles Our recruitment partner will find management staff for your business where you need a temporary replacement. They ll provide details of potential candidates within 48 hours. They ll also give advice and support when it comes to finding a permanent replacement, including writing job and person specifications, and drafting adverts and recruitment agency briefs. Legal help Your business will have access to a legal helpline. The helpline gives advice on all aspects of employment law relating to a claim including managing sickness and absence, termination and shareholder options. You can find out more about Bright Grey and the support you can expect from our Helping Hand service on our website. The substitutes bench is a really good offer for a company to be able to get a key person replacement within 48 hours means they don t have to arrange this themselves and recruitment companies can cost a fortune. A comment from an adviser 11

14 About Bright Grey We re not like other protection providers. We won t just hand you a cheque and walk away. We re here to offer you help and advice from the day your plan starts with our helplines and through access to medical and health professionals. We know that insurance can be complex and confusing so we try to keep it clear and simple. We hate jargon so we avoid it where we can. What else do you need to know about us? We re part of the UK s biggest mutual life and pensions group. Royal London has 52.2 billion funds under management, around 3.6 million customers and employs 3,040 people. So you can relax, you re in safe hands. And no matter who you speak to at Bright Grey, no matter what the situation, we ll treat you and your family as we would want to be treated ourselves. To find out more about Bright Grey go to Source: Royal London Group, 31 March Why do I need business protection?

15 Remember to call adviser. Any questions? If you have any questions speak to your adviser.

16 Business protection from Bright Grey T F E help@brightgrey.com A 2 Queen Street, Edinburgh, EH2 1BG W To find out more about Bright Grey go to Bright Grey. More financial sense from Royal London. We are backed by the financial strength and stability that comes from being part of the Royal London Group, the UK s largest mutual life and pensions company. Bright Grey is a division of the Royal London Group, which consists of The Royal London Mutual Insurance Society Limited and its subsidiaries. The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. The firm is on the Financial Services Register, registration number It provides life assurance and pensions and is a member of the Association of British Insurers and the Association of Financial Mutuals. Registered in England and Wales number Registered office: 55 Gracechurch Street, London, EC3V 0RL. PC2070C.0613