Protecting your business

Proactive Medical & Life is an Appointed Representative of Healthnet Services Ltd. Healthnet Services Ltd are authorised and regulated by the Financial Services Authority.

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Protecting your business

What do you protect?

Property Liability Vehicles Profits Ownership

Today we will look at why and how you should protect the

profits and ownership of your company

Think about as we go through today

• Your current profit levels

• Your home/work balance

• How the situations we discuss could change this balance

• How these changes would affect your lifestyle and financial security

WorkHome

Meet Dave

• Dave is the top salesman in the company.

• He is responsible for bringing in 50% of the company’s revenue.

• He holds valuable relationships with all of the company’s customers.

What would be the impact of Dave dying?

• Profits drop as not so many sales are made

• Relationships with key customers suffer and they start looking elsewhere to buy

• Dave’s replacement’s salary is higher as they had to be brought in at short notice

• Recovery is slow while Dave’s replacement get up to speed

• The bank stops the overdraft facility because profits are falling

• Management team has to spend more time in the business

What if a key person in your business died?

• How many Dave’s do you have in your business?

• Who could you really not do without?

• If they were not at work, how would your business suffer?

• What would happen to the balance in your life?

WorkHome

The solution

When Dave died, the profits dropped

The Company takes life cover out on

Dave…and pays for it

Life cover paid out on Dave’s death

and replaced the lost profitProfit £

Meet the board

• Sue, Bill and Jo own an IT consultancy company

• Each has invested significant time and money in the business and the value of their share in it is continuing to grow

• If one of them were to die, the others could carry on, although at a reduced turnover

• Their spouses/partners have no interest in the business and no skills to contribute to the business

What was the impact when Sue died?

• Sue’s partner wanted to sell Sue’s share of the business – and as neither Bill or Jo could afford to buy them out, their share was offered to a third party (if one could be found).

• Sue’s partner started attending board meetings and was pushing for higher dividends to be paid out to increase his income

• At the same time as dealing with Sue’s partner Bill and Jo had to put more time into the business to cover the work Sue would have done

• Plus, many of the same issues we saw with Dave

What if you or one of your co-business owners died?

• How many of your co-owners’ partners would need money rather than the share of the business?

• Could you afford to buy their share of the business?

• Would your co-owners’ partners want to be part of the business? Do you want them to be?

• What would happen to the balance in your, or your partner’s, life?

WorkHome

The solution

SUESUEDIES

SHARES

SUE’S PARTNE

R

LIFE COVER ON SUEIN TRUST TO

BILL & JO

SUE’S PARTNER ASKS BILL & JO TO BUY SUE’S

SHAREOR

BILL & JO ASK SUE’S PARTNER

TO SELL THROUGH A SUITABLE

AGREEMENT

LIFE COVER PAID

TO TRUSTEES

TRUSTEESPAY CASH

TO BILL & JO

BILL & JOBUY SUE’S

SHARE

It won’t happen to me……..

A business man has a

chance of suffering acritical illness or dyingbefore his 65th birthday

1 in 3

Source: http://www.ghfmsl.co.uk/insurance_life.php

A business woman has a

chance of suffering acritical illness or dying

before her 65th birthday

1 in 4

Do you want to do something about it?

• Please feel free to talk to me after the session

• I will call you to discuss your specific requirements over the next few days

This presentation is based on PROACTIVE MEDICAL & LIFE interpretation of the law and HM

Revenue & Customs practice as at 16th December. While this interpretation is believed to be

correct, PROACTIVE MEDICAL & LIFE can give no guarantee in this respect.