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Running a business can be fraught with a number of different risks. However, the insurance industry is there to enable businesses, what ever their size or line of work, to manage their risks and protect against the eventuality of something going wrong. One of these insurance covers that are on offer by various insurers is critical illness cover. The idea of life or critical illness insurance is to provide a tax free lump sum should the insured be diagnosed with a specified critical illness.
Of critical illness cover - Or earlier critical illness cover
My critical illness cover could provide a vital safety net for a business against the loss of an employee for any period of time, especially if this person is crucial member of the team. Generally, such an insurance plan is referred to as key person insurance. Key person insurance could be considered to be more appropriate for small businesses where they depend on few employees and if the key members of staff are absent the functioning of the business would greatly suffer. However, similarly this may be the case for the key employees of a larger organisation. So, if a particular or number of certain employees were vital to the success and profitability of a business then covering the person/people with critical illness insurance could be considered to be essential.
The life or critical illness cover is taken out by the company/business on the life of an employee(s). With such a mortgage critical illness cover policy the business is known as the plan holder and will pay the monthly premiums from the business account. However, the life assured is the employee and the critical illness plan is underwritten on their details such as; age, gender, smoking status, health, family health etc. If that employee were to suffer one of the specified illnesses listed on the plan then the insurance company will pay a tax free lump sum to the company/business. This will provide the business with the financial requirements to keep the business running smoothly. What the business actually uses the money for is entirely down to them; it could be to continue to pay the absent employee a wage whilst off work, to recruit a temporary (or if need be permanent) replacement, etc. Basically, whatever it takes to maintain the success of the business.
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