Overview and key points
Unexpected illness can disrupt not only lives but entire businesses. This article explores why critical illness cover is essential for safeguarding your company, your family, and your future. Through two real-life stories, we show the devastating impact of losing a key person and how having the right protection can make all the difference. From covering operational costs to providing financial security during recovery, critical illness insurance offers peace of mind when you need it most. Can your business afford to ignore this risk? Read on to discover why planning ahead is crucial.
Key takeaways
• Critical illness cover protects businesses from financial disruption if a key person becomes seriously ill.
• Real-life examples show the devastating impact of not having cover.
• Policies can fund temporary staff, equipment, and family expenses during recovery.
• Planning ahead ensures security for your business and loved ones.
People risk, in particular, key person cover, is often overlooked, necessary expense unless it is a requirement from investors. Protecting against the unexpected can be difficult to justify, particularly in the current economic environment. But have you considered what you would do if you, or a key person in your business, were no longer able to work?
Two true stories
In 2021, our Wellbeing, Health and Protection team were discussing key person and critical illness cover with a potential new client, and explained what critical illness cover is and how it can provide financial support to a business if something were to happen to a key individual.
At that time, the company decided not to go ahead with the proposed cover.
Two years later, we learned that the CEO of the business had suffered serious cardiac and respiratory complications following the removal of a tumour from her heart. Although now, thankfully, she’s on the road to recovery, the illness meant that she was unable to work.
As a result, the business that she worked so hard to create and grow has had to deal not only with the personal difficulties of this situation, but also the financial impact on the business.
It may well be possible for the individual would be able to secure some kind of life insurance or critical illness cover in the future, but it would likely involve significant costs and/or exclusions.
How critical illness insurance can help you, your family and your business
Having critical illness cover can really help a business continue to operate when a key individual is taken ill.
The owner of a small, family-run agricultural business suffered a heart attack in November 2021. A normally fit, healthy an active person in his 50s, it came as a complete surprise and had an immediate impact on both the family and the business. He was responsible for the majority of the physical work involved and although he was very lucky to only suffer a relatively mild heart attack, he still needed time to recover.
But without being able to work, the business – and therefore the family – could have been faced with bills to pay with no money coming in.
Fortunately, the gentleman had taken out life insurance that included critical illness cover. The policy not only to covered the mortgage on the family home, it also included a separate policy to support the business if anything were to happen to either him or his wife.
Both policies paid out a lump sum under the critical illness cover meaning that the family have a financial buffer to support them, he could take time out from the business to properly recover.
The funds helped with the costs of temporary staff and some new equipment to make some of the physical jobs that bit easier.
Can you afford not to consider critical illness cover?
We don’t know what will happen, but we do know that when you put measures in place to protect yourself, your family and your business, you have security when you need it most.