How to Deal with the Death of an Employee

Are you a business owner looking for life insurance for your company directors?

Read on to find out your options and obligations should the worst happen.

Death of an employee is an event which every business owner hopes they will never have to experience, but it isn’t something you can predict or prevent. With that being the case, the best thing you can do is prepare for it, and one of the most efficient ways to plan for such a sad eventuality is through a suitable life insurance policy.

Losing a person in your business

In the event that an employee in your business passes away, the first thing to do is provide support to the bereaved family. You may also wish to offer compassionate leave to colleagues, who are likely to be affected by the passing of someone they knew well. Depending on the circumstances of the employee’s death, access to counselling services may be appropriate, too.

But what if the employee is one of the directors of the business? While all employees are important – because people are always a key asset of any business – if a company director passes away unexpectedly, there will be a range of legal and financial obligations which need to be met. This is where life insurance for company directors can help.

Specialised insurance policies

One of the main benefits of a specialised company director life insurance policy is that premiums can be paid for through the business. This offers financial benefits both for the employee and for the company. For example, a popular choice is an HMRC approved policy, as it can be claimed as a tax-deductible business expense. You can use this kind of policy to cover and protect various aspects of the business and the welfare of the owner’s family.

Overview: how the policy works

A life insurance policy will pay out a cash lump sum, which will go to the designated beneficiaries, for example the deceased director’s family. This type of policy is set up and payable through a suitable trust.

Tailored coverage

Insurance providers offer customisable policies to suit the individual needs of your company. To find one that is the best fit, you should carefully consider the circumstances of your business and the person whose life is being insured, including factors such as their salary, financial obligations, and various business responsibilities. Specialised advice is key, not just to ensure you obtain the right policy with the most appropriate cover and premiums, but also to understand any relevant tax implications.

In conclusion, life insurance for company directors in the UK provides crucial financial protection, ensuring peace of mind for both the person in question and their family. An appropriate policy means that they can safeguard the future of the business while also providing for their loved ones, in the event of their death.