Hyde Associates - Protection & Insurance

Shadwell, Leeds LS17 8LB

Phone:- 0113 2188890

BUSINESS PROTECTION & PERSONAL INSURANCE & PROTECTION

Business Protection

This information is provided as a generic guide and gives a overview of considerations relating to arrangements and solutions for a business and its owners. It is not an exhaustive list; however, it represents the key areas. There are various aspects and reasons for business insurance and it is of utmost importance that the business considers and recognises its own requirements through understanding the impacts of not holding the appropriate and relevant insurance. Aside from the legal requirements there are some key areas for consideration.

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Key Person Insurance

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Key Person Insurance

Key Person Insurance cover protects the business resulting from the death or extended ill health of an integral member of the business. The Insurance policy will normally pay a lump sum upon death or upon diagnosis of a serious illness (Your provider will be able to give you all the relevant information).

The consideration for the business is precisely the impact that such an event would have and that in turn that event may carry a heavy financial ramification for the business. As part of a businesses risk management and particularly “Business Continuity” such considerations are usually in place.

The rationale for considering such cover to the business include the following: • Minimise a potentially significant business disruption
• Obtain funds to support the businesses profit
• Liquidity to replace a key individual
• Tax relief, which is usually granted on the premiums if for 5 years or less

Who should a business protect?
Quite simply, if there would be a significant loss of profit or another notable financial concern or if someone is not contributing for an extended period of time, Key person Insurance should be considered. Some examples include:

• A member of staff that has particular and specialised knowledge in their field
• Crucial members of your sales force
• Those that manage important client accounts
• Managers of your company finances or specific legal aspects of your business

Share Protection

We arrange Shareholder Protection (life & critical illness) to allow the remaining shareholders to purchase the shares if a shareholder dies or becomes critically ill.

Protect the shares within a business

Shareholder protection allows the remain shareholder to purchase the shares in your business if one were to die or become critically ill.

How shareholder protection works

Term life insurance is taken by each shareholder for their value of the business. This is then written under a business trust and cross option agreement in favour of the other shareholders. If a shareholder dies or suffers a critical illness (if taken), it allows the remaining shareholders to purchase the shares. We offer 2 types of shareholder protection, as detailed below. As an independent broker, we’ll go to the market to find the right insurer and the right shareholder protection policy for you, at the right price. Terms & conditions will vary, according to the insurer, but we’ll discuss your best options with you. Please contact us for an initial, no-obligation chat.

Fixed-term life insurance

A fixed lump sum is paid in the event of the shareholders death
The policy term is fixed
The premium is also fixed throughout the term of the policy

Life with Critical illness insurance

A lump sum is paid if the shareholder dies or is diagnosed with a serious illness (such as cancer or a heart attack)
The policy term is fixed and should be reviewed on a regular basis.
The premium is also fixed throughout the term of the policy

Share Protection

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Partner, LLP & Directors Share Protection

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Partner, LLP & Directors Share Protection

Have you thought about what would happen if one of you were to die or become critically ill?

Would the remaining partners or shareholders have sufficient funds to buy your share in the business?

Would your dependents want to sell your share or become involved in the business?

If you or another owner of the business became critically ill, could somebody else purchase your share so that you could give up work?

You can ensure that the future of your business is taken care of by taking out either a Partnership Protection Plan or a Shareholder Protection Plan depending on your company status. This involves a legal agreement regarding future ownership of the business in the event of the death or critical illness of either you or another owner in the business. This is known as a cross option agreement.

This is also known as Partner Protection Insurance, Partner Share Protection or a Share Protection Plan. By taking out this type of plan you can ensure that if a partner dies the remaining partners will receive a lump sum from the insurance company to enable them to purchase his share of the business.

With succession planning of this nature you should take out a Share Purchase Agreement as well as life insurance. This agreement would stipulate that the partnership will continue. Without this type of agreement in place, if one of the partners was to die the partnership would become dissolved, in accordance with the law in England, Wales and Northern Ireland.

The procedure is as follows:

Set up life insurance for each partner with a sum insured equal to their share in the business.
Put the policies in trust to avoid tax implications when you receive the lump sum payout.
Set up a Cross Option Agreement, which will facilitate purchase of the deceased person’s share of the business by the remaining partners.

Business Loan Protection

How does Business Loan Protection work?
Business Loan Protection is either life assurance or life assurance with critical illness cover included. A policy is taken out on the life of a key individual or individuals so that any money due from a claim can be used to help pay towards any outstanding debt or loan.

Issues to consider
If an overdraft, loan or commercial mortgage is unable to be paid does it have serious implication for your business?
Director loans accounts should be repaid on death – where will this money come from?
The loss of the individual or individuals who have guaranteed the loan.

Determining the level of cover for Business Loan Protection
The level of cover should reflect the amount needed to help pay the outstanding borrowings. The policy should be set up to reflect the terms of the borrowings and could be on a level or decreasing basis.

Tax
Premiums will generally be paid by the business. As a ‘rule of thumb’ the premiums will not qualify as a deductible business expense for the business. However, the benefits will not generally be treated as a trading receipt. It’s important that the business gets clarification from the local inspector of taxes, as this may not always be the case.

Trusts
Trusts are not normally required where the business is a company, Limited Liability Partnership, or Scottish Partnership, in these cases the policy can be owned by the business.
Trusts may be appropriate where the business is a traditional partnership in England and Wales.

Business Loan Protection

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Relevant Life Plan

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Relevant Life Plan

What is a Relevant Life Plan?

A Relevant Life Plan is a term assurance plan available to employers to provide an individual death in service benefit for an employee. It's designed to pay a lump sum if the person covered dies or is diagnosed with a terminal illness, whilst employed during the term. A Relevant Life Plan is paid for by the employer.

Who is it aimed at?

Employers looking to provide 'death in service' benefits, but with too few employees to set up a group scheme.
Directors wishing to provide their own individual ‘death in service’ benefits without taking out a scheme on all employees.
High earning individuals, such as directors, where ‘death in service’ does not form part of their ‘lifetime allowance’ (£1.5 million 2012/13).

Relevant Life Plans are not available where there is no employer/employee relationship. For example, sole traders, equity partners of a partnership or equity members of a Limited Liability Partnership.

What makes it cost effective?
Relevant Life Plans are similar to most other types of life cover except they aim to provide a tax efficient benefit provided by an employer for an employee.

Why choose a Relevant Life Plan?
A big saving can effectively be made on life cover, as our Relevant Life Plan can work out much cheaper than a typical life policy.

Personal Insurance & Protection

Any one of us could suffer an unexpected critical illness, serious injury or the death of a breadwinner. It’s a difficult scenario to bring up but it’s important to make sure you have the right protection in place to help protect your family, your home and your lifestyle.

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Home Insurance

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Home Insurance

Home insurance is made up of two types of policy, buildings and contents cover, which can be bought individually or combined.
Buildings insurance protects the physical property as well as its permanent fixtures and fittings, such as fitted kitchens and sanitary ware. Policies could also include cover for outbuildings such as greenhouses, sheds and garages, along with accidental damage to underground pipes, cables and glass in doors and windows.
If you're renting it should be your landlord's responsibility to sort out this cover so you should only have to concern yourself with contents insurance. Typically buildings insurance covers damage caused by flood, fire, subsidence, theft, storms or malicious damage.
Most lenders make it a condition that you have buildings insurance when you take out a mortgage, and may offer you a quote for buildings cover. But remember that you don't have to accept their policy and you may find a better deal by shopping around. Making a reasonable assessment of your property's rebuild value is a key element in organising buildings insurance.

Contents insurance protects any valuable possessions that you keep within your property - this could be roughly defined as anything that you would take with you if you moved house. This could include items such as:

Furniture
Household goods
Kitchen equipment
Television and electrical items
Personal items and valuables

Contents policies will usually provide cover against theft, fire, vandalism, accidental damage, water leaks or explosions.

Accident, Sickness & Unemployment

Payment protection insurance (otherwise known as short term income protection) and mortgage payment protection insurance, are both different forms of Accident, Sickness and Unemployment cover, more commonly known ASU.

This kind of policy is particularly useful if you are concerned about whether or not you could cope financially in the event that you lost your job through redundancy or ill health.

You can take out an accident sickness and unemployment policy that is specific to a debt so that repayments will continue to be made in the event that you lose your income through an accident, sickness or after becoming unemployed.

Bear in mind that most ASU insurance policies are time limited, so they will only pay out for a set period. This can range from a few months to a couple of years, although if you decide instead to opt for a broader income protection policy, this will continue to pay you a monthly amount until you either recover or until the end of the policy term. Policies also carry certain restrictions. For example, you may not be covered if you are already at risk of unemployment when you take out a policy.

The longer your cover lasts, the more expensive it is likely to be.

ASU

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Personal Protection (Income Protection)

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Personal Protection (Income Protection)

What is income protection insurance?
Income protection insurance, or IP insurance as it's also known, can provide cover if you're not able to work.
There are typically three types of things that you're protected against - accident and sickness only, unemployment only and the more comprehensive, accident, sickness and unemployment cover.

You're able to protect up to 70% of your gross salary and it's designed to replace your income and to pay out a tax-free monthly sum, which can be used to help ease any financial hardship whilst you're unable to work.

Why should you take out income protection?
Income protection is a useful product for anyone who wants to cover their salary so they don't fall behind with monthly outgoings should they be unable to work.

Typical times when people consider it include:

If they'd struggle to make ends meet if they had no incoming salary
If they have dependants
If they're self employed

How long is the benefit term? The longer you want a policy to have the provision pay out for (the 'benefit term'), the more the premium is likely to cost.
Short-term income protection policies are designed to provide you with payouts should you be unable to work for a set period of time, usually between six and 12 months. Long-term income protection insurance can provide cover if you become so ill that it's unlikely you'll be able to work again.

Life Insurance

Life insurance, also known as life cover or life assurance is a way to help protect your loved ones financially if you were to die during the length of your policy.
Please remember that life insurance is not a savings or investment product and has no cash value unless a valid claim is made.
You choose the amount of cover you need and how long you need it for and you can pay your premiums monthly or annually. In return, your family has the reassurance of knowing that if you died while covered by the policy they could receive a cash sum pay out if a valid claim is made.
They could use this to help with household bills, child-care costs or covering mortgage payments.

Why do I need life insurance?

Dependents: If you have a partner, children or someone who relies on you for help or income, then you should consider life insurance.
If you earn an income which helps with household bills, either as a sole breadwinner or as part of a couple, then without that money the family might struggle to pay bills like the mortgage or rent.
If you only work part-time, or are a home-maker, your family may find it hard to cover the cost of finding someone to look after the children or another family member if you were no longer around. So anyone who has dependents should consider taking out life insurance.
Debts or mortgage: It could also be important if you have debts, loans or an outstanding mortgage on your home. Life insurance could pay out a cash if you die during the policy term and this could be used to help pay off these debts or it could help your family with every day living expenses or child care costs. It could help cover funeral expenses too.

Life Insurance

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Critical Illness

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Critical Illness

Critical illness affects many people, at any age, and can turn families’ lives upside down. If you were to become seriously ill would your loved ones struggle to keep up with household bills and the mortgage? Make sure that you and your family are financially protected against the impact a critical illness could have. You can choose to add critical illness cover at an extra cost when you take out life insurance. The money you could receive can help make life easier - and help you focus on getting better.

What is Critical Illness Cover?

Critical illness cover could pay out a cash sum if you get one of the many specified critical illnesses we cover during the length of your policy, such as heart attack, cancer or stroke.
Critical Illness Cover can be added for an extra cost when you take out either life insurance or mortgage life insurance. Extra benefits are included at no additional cost, such as Terminal Illness Cover and Accidental Death Benefit.
And if you choose to add Critical Illness Cover, we automatically cover your children for critical illness too.See additional benefits for more information.

Do I need Critical Illness Cover?

If your family rely on you financially it's worth considering critical illness insurance to help protect against the impact a critical illness could have on you and your family. The pay out could help to cover things such as child care costs and household bills.
Or you may want to use the pay out to help make adjustments to your home or lifestyle if needed, or to pay for specialist medical treatment - or even to take that trip of a lifetime to help you recover.