What would happen if your business Partner was incapacitated through a critical illness or died? Could you afford to buy their share of the business and protect your company?
If a partner dies, their partnership interest passes to their estate, with the beneficiaries usually being their husband/ wife/ civil partner and children who may have no interest or knowledge of the business and may want to withdraw their share of the capital.
With Partnership Protection, if a partner dies or becomes critically ill, a cash sum will become available so that the other partners can buy their interest. This ensures minimum disruption to the partnership and the critically ill partner or the personal representative of the deceased partner will receive a cash amount equivalent to the value of their interest.
It is a simple and quick insurance to set up. A life assurance policy is set up by each Partner covering a specified amount and an agreement is put in place enabling the remaining Partner(s) the right to buy the interest in the business and the spouse the right to sell their interest to the remaining partner(s).
Think about what would happen if a Partner was deceased or incapacitated and you didn’t have Partnership Insurance?
- The Partner’s share may go to their family, who may not have any interest in the business
- Other partners may not have the finances to buy the deceased partner's share of the Partnership
- The share may be purchased by someone who does not share the same interests as the existing partners
Call us now to discuss how you can protect your business Partnership.