Business Protection Insurance

Life Cover

Helps protect your clients business if a key employee, shareholder or partner dies.
Life Cover provides a lump sum cash payment if the person covered dies or is diagnosed with a terminal illness (with a life expectancy of less than 12 months). The person covered could be a shareholder, business partner or Key Person.
Vitality’s Life Cover we offer is available on a fixed term or renewable term basis. If you select a renewable term at the end of 5 years you have the option to take out a plan for a further 5 years.

More cover whilst we assess your application
With the VitalityLife Plan your business will receive free cover at no extra cost whilst the business is waiting for its application to be assessed.

More flexibility to suit your business’ needs
We offer Vitality’s Life Cover on a level, indexing or decreasing basis. With level cover, your cover is designed to stay the same over the life of the plan – it will only change if you change a cover. With indexed cover you can choose for your cover to increase in line with the Retail Prices Index (up to maximum of 10%) or by 2%, 3%, 4% or 5% p.a. With decreasing cover, your cover decreases each month in the same way as the outstanding capital on a repayment mortgage at an interest rate that you choose between 5% and 15%.

More safeguards with our guaranteed insurability options
Vitality’s guaranteed insurability options allow you to increase cover for your business when certain events happen without giving us information about the health of the person covered. These events include a change in the value of a Key Person, an increase in the value of a partner or shareholder’s interest in the business and a new or increased loan or mortgage.

Plus – Life Cover for people with HIV
We are providers of Vitality who are the first mainstream insurance company to provide Life Cover for people with HIV, of up to £250,000 for a maximum of ten years.

Disability Cover for Business

Add to life Cover for enhanced protection against serious injury or illness.
Disability Cover for Business provides a lump sum if the person covered becomes disabled because of an accident or suffers a serious illness.
It helps you protect against the financial impact should a Key Person, shareholder or partner become disabled. If the person covered becomes disabled, this cover gives you financial support to keep your business running.

More appropriate cover for business needs
We provide Vitality’s Disability Cover for Business, which has been designed specifically for businesses. It provides a payout for conditions that are so disabling that the person covered is no longer able to work in the business and is unlikely to recover.

More certainty of cover with objective medical definitions
Vitality use medical criteria to define the conditions which lead to a payout with Disability Cover for Business. This means you will be assured of a benefit payment when it meets the claim definition.

More flexibility to suit your business’s needs
We offer Vitality’s Disability Cover for Business on a level, indexing or decreasing basis. The cover amount for Disability Cover for Business can be different to the Life Cover amount. You can choose between a fixed term or renewable term option.

More safeguards with our guaranteed insurability options
We off Vitality’s guaranteed insurability options to allow you to increase cover when certain events happen without giving us information about the health of the person covered. These events include a change in the value of a Key Person, an increase in the value of a partner or shareholder’s interest in the business and a new or increased loan or mortgage.

Key Person Cover

Gives your clients a payment to help protect their profits if an employee dies or suffers a serious illness.
Key Person Cover is a Life Cover policy taken out by a business on the life of one of its employees or directors. The cover is designed to protect the net, pre-tax profits of small and medium-sized companies in the event of death or serious illness of one or more of the company’s key employees.
Who is a Key Person?
Key Persons with specialist knowledge are instrumental to the business, without which the business would have a detrimental effect. Assessment of the impact of death or serious illness includes looking at the impact on profitability but not on the applicant’s income.

How a Key Person could affect the business
In many small, privately-owned businesses, the persons whose loss would cause the greatest financial damage to the business would be the owners, i.e. usually the partners or shareholders – normally shareholding directors. Where the business is run as a sole trader-ship, the most important Key Person is also likely to be the owner. Given that the main criteria to qualify as a Key Person is the person’s potential to cause serious loss of income or profit for the business upon death or serious illness, employees of all types, particularly those with special knowledge or skills can also be a Key Person.

The extent of the cover need
When calculating the extent of any business continuation cover required, there is a focus on the need for liquidity on the death or serious illness of the identified Key Person. The recommended approach is to draw up a checklist of ‘reasons why’ funds may be needed on either of these occasions including: • loan repayment
• replacement of lost profits
• cost of recruitment of replacement personnel
• repayment of partners’ /directors’ loan accounts

To arrive at the required level of cover, each of these needs must be quantified for each Key Person.

Loan Protection

Gives your clients a repayment to repay business loans if a shareholder or a business partner dies or suffers a serious illness.
Cover for business loans if a shareholder or business partner dies or suffers a severe illness.
If a business owner dies or is suffering a severe illness, lenders may have the right to demand that any outstanding loans are paid back. These could be difficult to pay off at short notice. Loan Protection provides a lump sum to cover business loans. If a business owner lends money to their own business, creating a Director’s or Partner’s loan account, this may also need to be repaid on death. Some business loans may also have personal guarantees, if the business fails due to the death or illness of an owner or key employee and the business doesn’t have the funds to repay the loan, the guarantee could be used by the bank and put personal assets, including the owner’s home, at risk.

Lenders may have the right to demand that the business pays back any outstanding loans and this could be difficult to pay off at short notice. Our Loan Protection solutions means businesses won’t have to worry. If a business owner dies or becomes seriously ill, it provides a lump sum to cover any business loans and other credit facilities. What’s more, with Vitality’s guaranteed insurability option we offer, clients can increase their cover in line with an increasing loan. If this option is chosen the premium will increase depending on the amount of additional cover applied for. Maximum increases will apply.

Shareholder and Partner Protection

Gives your client a lump sum so they can keep control of the business if a shareholder or a business partner dies or suffers from a serious illness.
Shareholder and Partner Protection provides a business with a cash lump sum if a business owner dies or suffers a severe illness. This lump sum provides the capital to enable the surviving business owners to purchase the deceased’s or incapacitated individual’s share of the business – allowing them to keep control of their business.
Who is Shareholder and Partner Protection designed for?
Where all the owners of business are members of the same family then there is usually no problem with succession when one of the owners dies or becomes incapacitated. However, in businesses run by unconnected parties (or families where succession is not assured) the death or incapacity of an owner is likely to cause serious disruption to the business and problems for both the business and the family of the owner concerned. This can apply equally to partnerships, LLPs or limited companies.

Why is Shareholder and Partner protection needed?
If a business owner dies or suffers a severe illness, their share of the business will usually pass to their beneficiaries. To regain full control of the business, the surviving business owners will need to buy the deceased’s or incapacitated individual’s share of the business. Many businesses will not have the available capital to do this and so Shareholder and Partner protection provides the framework where the right money is left in the right hands, at the right time.

Relevant Life Policy

Cost effective alternative to Life Cover. A tax-efficient way for your client to give their best people the best benefits.
A cost-effective and tax-efficient alternative to ‘death in service’ benefit.
Many companies offer their employees a ‘death in service’ benefit, paying the employee’s family a lump sum if they die while they’re employed. However, this kind of benefit doesn’t suit every company.
• It’s not normally available to companies with fewer than five employees
• It’s arranged on a group basis which makes it harder to tailor benefits to suit different employees
• It may not suit everybody either, high earners with large pension pots can find it takes them over their Lifetime Allowance

There is however a tax-efficient and cost-effective alternative. Not only can your clients save nearly 50% tax (compared to an ordinary life policy) but they can help their employees lead healthier lives and reward them with a range of discounts when they take out a Relevant Life Policy with VitalityLife.

An SME employee benefits package. Big business benefits for small businesses.
A Relevant Life Policy from VitalityLife helps your clients and their employees to lead healthier lives. You can offer a wide-ranging employee benefits package that your clients might not otherwise be able to access.

The opportunity
A Relevant Life Policy is suitable in many situations, not just SMEs looking for life cover or an employee benefits package

Company directors
Directors of limited companies can enjoy valuable tax benefits if the premiums for life insurance are paid by one company instead of from personal income after tax.

Flexible cover
A Relevant Life Policy can provide individually calculated cover levels so are suitable where companies only want to reward several employees or provide variable cover.

High earners
The benefits of Relevant Life Polices do not count towards the current Lifetime Allowance of £1.25 million, above which tax is currently charged at 55% tax (on death).

Benefits for you
• Offer your clients more than just a standard RLP
• A great employee benefit package to sell to business clients
• Opportunity to sell further business solutions – loan protection, key person, shareholder business and VitalityHealth SME schemes. Benefits for your clients
• Tax efficient – nearly 50% tax savings – a tax deductible business expense and no National Insurance contributions
• A great employee benefit for small businesses
• More affordable cover – an upfront discount on the protection premium of between 5 – 20% for fixed term cover with Vitality Optimiser
• Your clients could receive up to £100 cashback each year with Vitality Optimiser or Vitality Plus depending on how much their employees do get healthy
• Fitter, healthier, more engaged employees that take less time off and are more productive
• Available to companies of all sizes on an individual basis
• Help attract and retain the best people
• Can be used as a ‘top-up’ to death in service benefit Rewards for being healthy

All VitalityLife plans offer your client rewards for being healthy. Vitality Optimiser and Vitality Plus are also available so you can offer your clients even more. A VitalityLife Relevant Life Policy works differently when you add Vitality Optimiser or Vitality Plus – the planholder receives the upfront discount or any premium discount (Vitality Optimiser only) and any cashback. The person covered (i.e employee) receives the remaining discounts and benefits