The underutilised life insurance policy available to company directors
Company directors can avail of a life insurance policy called Corporate Company Directors Insurance. Rather than having to pay an individual life insurance policy on a monthly basis, this policy is paid directly by the company.
In the unfortunate event of the premature and untimely death of a company director before the age of retirement, the Corporate Company Directors Insurance policy will pay out a pre-agreed sum to the company. This pay out can then be used to buy back the shares at a pre-agreed price from the deceased employee’s estate or family by way of a ‘Buy and Sell’ agreement.
This type of policy adds great value to not only the estate of the director and the company but it also avoids any potential conflict. This allows for the quick and smooth transition of assets. Many company stakeholders and directors are unaware that this form of life insurance is available to them.
It is important not to confuse this policy with that of Keyman insurance. The levels of protection offered by the policies mentioned above are very different. Where the Keyman policy is written solely for the company’s benefit, a Corporate Company Directors Insurance policy provides great benefits to both the company and the director’s estate.
For more information and a personalised report tailored specifically for your company, contact Oomph today.