Making decisions about your company budget and deciding where savings can be made is challenging – particularly in these challenging times. Making the wrong decision can prove costly – and heart-breaking if circumstances change.
Talking about death and serious illness is never easy, but as a business owner, it’s vital that you plan for the unexpected. What would happen if you suffered a heart attack or were to be diagnosed with a terminal cancer?
You might well have a life assurance policy – perhaps key person or shareholder protection cover in place. However, if this was set up to pay out in the event of death, how would you – and your business cope in the event of long-term, terminal ill health?
Two recent – and very sad stories, have brought this scenario to news headlines. Whilst they don’t make for easy reading, they both contain a very important message.
Many of us will know of Jonnie Irwin – presenter of TV shows such as “A Place in the Sun” and “Escape to the Country”. You may have seen his very open and candid TV interview at the end of last year in which he publicly shared his regret at not taking out critical illness cover when he bought life insurance.
Here’s what he had to say. https://cdn.jwplayer.com/previews/cmETwATZ
So when you get a terminal diagnosis, it covers you for when you're gone," he said. "Probably the last few months. But terminal diagnosis' can go on for years and...your illness affects your work, so if you're unable to work and you're waiting for this payout, who is going to pay the rent? So critical illness is a policy you take alongside that and that kicks in as soon as you're ill. I didn't take that and that took a lot of a lot of pressure on having to work on days when I didn't want to go to work, and that's one mistake I say to everyone.
The second story, tells of the closure of a local bakery after 42 years in business after the owner was diagnosed with terminal cancer.
Owner, Roy Drake, is receiving palliative care and the doctors have told the family that he has between six months and two years to live. Speaking to The News, Portsmouth, in January, Roy explained:
“We had to make the agonising decision to close the business down. Nine staff members were made redundant, me and my wife lost our jobs, all on Christmas eve.
“It has been a thriving business for many, many years. We have worked hard and enjoyed the income and to have to close – It is devastating, it really is.”
The business has been at the heart of the family for the past four decades and they had to come to the difficult decision not to reopen their doors after the Christmas period, and the business is up for sale.
Planning for the unexpected
Smart business owners recognise that, in order to ensure the future success of their business, a resilient people strategy is critical.
Not only can it minimise the impact brought about by the loss of people that your business relies upon, but it can also make sure the business remains in the right hands in the event of death or serious illness of a business owner and / or key employee.
Talk to us to review your business protection arrangements and build resilience for whatever the future brings. We can guide you through the options to support your business including:
- Key person
- Shareholder protection
- Business loan protection
- Relevant life
As these stories demonstrate, having a business protection strategy is critical – it can be the difference between your company surviving or going out of business.
