Corporate and Business Assurance
Group Risk Cover
If the fund member dies in service, prior to retirement, the Group Life Assurance Death Benefit cover pays out a lump sum to the member’s nominated beneficiaries. This benefit is usually a multiple of the employee’s annual salary but can also be selected as a fixed Rand amount.
A Provident Fund is set up by an employer for the benefit of its employees and governed by the Pension Funds Act. The object of Provident Funds is to provide annuities (pensions) for the members upon retirement.
Alternatively, members can elect to receive the whole benefit at retirement as a cash lump sum or the members may elect a combination of an annuity and lump sum benefit. Should a member die prior to reaching retirement age, the accumulated value of their retirement savings will be distributed to the member’s dependants and/or nominees by the fund’s trustees.
Key Person Assurance
To replace a key person in your business – be it an owner, shareholder, or employee with specialised skills – can be costly. Not only do you lose the knowledge and experience of that person, but if they are integral to the running of your business it could affect your business’s future.
These key persons are at the helm of your business – they steer, create and drive your enterprise. Can your business survive if you lose such a valuable asset? The solution is insuring your business against the loss of a key person. This will give you the necessary cash on-hand to recruit and train a replacement.
- Benefits of the Key Person Assurance solution include: Cover for loss in profits. Losing a key employee or founder will have an effect on the company’s bottom line. Key Person Insurance will keep your income and cash flow healthy. Cover for the downtime. The time it takes to recruit and train a replacement, or the time that the key person is unable to work.
Buy and Sell Agreement
What is a Buy and Sell Agreement? It is a legal and binding agreement between business owners that allows for the purchase of the disabled or deceased owner’s share of the business through a life assurance contract that pays out a lump sum on disability or death.
What would happen to your company if one of the business owners were to become disabled or die? Disability and death are not things that we like to think about, but if one of the business owners were to die or can no longer work, would you and the other owners be able to afford to buy their business interest? Failing to plan for this unexpected event can destroy a business, leaving nothing for those who built it.
A simple solution to this problem is a properly structured Buy and Sell Agreement that guarantees that on the disability or death of a business owner the necessary funds will be available to buy their business interests from the proceeds of the Life Insurance contract.
A Buy and Sell Agreement will ensure a seamless transition of ownership and protect the financial future of the business, while the deceased’s family receives an agreed price for their business interests.
A good shareholder agreement offers vital protection for your company. Good fences make good neighbours, and when it comes to business, good shareholder agreements make good partnerships. Not only does a shareholder agreement outline what each party agrees to, but if offers crucial protection for you, your partner and your business in the event of unforeseen circumstances. A shareholder agreement deals with the relationship between shareholders and the relationship of shareholders with the company.
It deals with the ownership of shares, the disposition and alienation of shares, the management of a company, meetings of shareholders and directors, voting rights and such meetings, the composition of the board of directors and dividend policy of the company.
The following should be outlined in a shareholder’s agreement:
- Share capital
- Dividends/payments to shareholders
- Transfer of shares
- Deemed offer
Overhead Expense Benefit
If you are self-employed this benefit will assist you to cover the running expenses of your business in the event of your temporary or permanent disablement. The benefit is payable for up to two years, giving you adequate time to speed up your succession plan, bring in a partner or sell your business.