From the beginning of May, Britain’s small businesses were able to apply for quick and easy-to-access loans from £2,000 up to £50,000, with the cash expected to land within days.
With an interest rate of just 2.5%, thousands of small businesses including high street coffee shops, hairdressers and florists have been offered this support.
Whilst these businesses have been provided a lifeline by the Government, they also need to consider what would happen during this loan period if the key person within the business were to become critically ill or die. Who would the loan payback fall on?
- What will happen to the business if the key person within the company were to die or become critically ill?
- Whose responsibility would it be to pay off any business loans if something were to happen?
- Are there any other loans or mortgages that would need to be repaid?
Key Person insurance traditionally covers against the loss of key individuals in a business which would result in financial loss, either in terms of lost income, loss of confidence in the business, or someone who is simply pivotal to the ongoing success of the business. When a business loses a key employee, this can negatively impact the business’ long-term revenue, and potentially contribute to a company’s failure.
In small businesses, the key person is usually the owner and would likely be the one in charge of the Government-backed loan. By taking out a Key Person policy you can have peace of mind that there is protection for the duration of the loan period.
Please note, prices depend on the following factors: age, smoking status, health and lifestyle, amount covered and how long the policy will run for.