Directors' or partners' share agreements may provide for the remaining directors to purchase the shares of other shareholding directors should they die. However there is a risk that the remaining directors may not have sufficient funds to hand when a fellow director passes away unexpectedly.
One solution to this is to take out life cover as a source of funding.
To arrange such cover requires the understanding and agreement of all concerned. It will also require some careful calculations to determine how much cover is required.
However, it will be a comfort to all directors or partners of a business to know that their own or a colleague's death will leave the other directors with sufficient support to carry out the terms of their shareholders' agreement.
This type of policy can also include critical illness for protection in the event that a director or partner is forced to leave due to illness.
The plan will have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
Share protection through life assurance
Directors' or partners' share agreements may provide for the remaining directors to purchase the shares of other shareholding directors should they die. However there is a risk that the remaining directors may not have sufficient funds to hand when a fellow director passes away unexpectedly.
One solution to this is to take out life cover as a source of funding.
To arrange such cover requires the understanding and agreement of all concerned. It will also require some careful calculations to determine how much cover is required.
However, it will be a comfort to all directors or partners of a business to know that their own or a colleague's death will leave the other directors with sufficient support to carry out the terms of their shareholders' agreement.
This type of policy can also include critical illness for protection in the event that a director or partner is forced to leave due to illness.
The plan will have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
Stanford Rhodes Wealth Management Limited is registered in England and Wales, Number 5517447. Registered Address: 4 Clifton Moor Business Village Clifton Moor Business Village, James Nicolson Link, York YO30 4XG.
StanfordRhodes Wealth Management Ltd is an Appointed Representative of Quilter Financial Limited,which is authorised and regulated by the Financial Conduct Authority and is entered on the FCA register (http://www.fca.org.uk/register) under reference 497604.
The information and content within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.
