Crucial advice for your financial affairs
YBC Financial Planning & Advice
Free initial Consultation
No Obligation Financial Health Check
Self Employed Life Cover
Since a recent change in the law, the self-employed can now save 20% on their life insurance premiums. Anyone who runs a small business can now look to replace an existing life assurance policy with this new type of policy where the premiums can be paid from the business account and deemed a business expense. This clever new type of life cover is called Relevant Life Term Assurance (RLTA).
RLTA now allows small businesses to provide tax efficient death in service benefits for the Shareholding Directors, as well as other select Key Employees. A business owner could consider setting up any required personal life assurance provision as a RLTA plan to benefit from the rules regarding both tax relief on premiums as well as the ability to pay out the sums assured free of tax.
RLTA plans are set up under a special Trust, so that a death benefit is paid to the deceased’s family during a specified period of time free of tax, the ‘term’ of the plan.
As term assurance is has a fixed term, designed to come to an end after the specified term of say 5, 10 or even 40 years, these plans are attractive to clients who need high levels of protection for a limited period and at the lowest cost.
Self Employed Sick Pay
Employees of big companies who are off work will often still be paid by their employer. The self-employed do not have this luxury! An Income Protection Plan (IPP) is an insurance plan designed to pay a monthly tax free income to replace lost earned income. Loss of income typically occurs when someone cannot work as a result of sickness or injury.
IPP plans are commonly ‘permanent’, meaning that the life office, regardless of the duration and frequency of any claims cannot cancel the plan if the plan owner is paying the contributions. The period of protection normally lasts for the client’s working life and finishes at say age 60 or 65. IPP insures an individual’s health rather than their life.
Even though only a proportion of someone’s income can be protected (e.g. 60%), a policy can pay out for a number of years so the total pay-out can often amount to far more than the total of conventional life assurance.
There are a vast number of illnesses and injuries which prevent people from working. Stress or even a bad back could trigger a claim, or something more serious such as time off due to cancer or a heart attack.
Secure your Business – Shareholder Protection
If you own and run a business with one or more business partners, and one of you dies, then keeping control of your own business can be a very expensive exercise! On death, shares pass to the husband or wife, who then assumes partial control of your business. Shareholder Protection is an insurance policy set up by the business to make sure to have a lump sum with which to buy back the shares and keep control.
Shareholder Protection is therefore used in small business operated as a private limited companies with shareholding directors. On the death of one of the shareholding directors, there are typically two key risks that need to be protected against to avoid operational and financial upheaval:
- Control: The surviving shareholders find themselves sharing control of their business with an outsider who may know nothing about the business.
- Deceased’s Family: Possible financial hardship for the deceased’s family – there being no ready market for the shares (especially if the deceased held a minority holding) or restrictions laid down in the transferability of the shares in the company’s Memorandum and Articles of Association.
A shareholder protection life assurance plan would enable the surviving shareholders to purchase the shares from the deceased shareholder’s estate. This way the deceased’s family is looked after, and the business can continue as planned.
Loss of Profits Insurance - Key Person
If a star employee gets seriously ill or dies, then the business will likely suffer financially. Key person cover protects the business in this event, protecting against the financial consequences to a business that would otherwise result from the death or serious illness of a key employee. Effectively, key person cover is loss of profits insurance as the business receives a cash sum to offset the effect of a reduction in sales.
A key person is anyone with specialist skills or knowledge, or with particularly important areas of responsibility, whose loss to a business would adversely affect its profitability.
Such a person cannot easily or quickly be replaced and a business can suffer significantly during the time that it takes to find that replacement.
Key person cover is designed to give businesses a cash injection so that profits are effectively maintained while the best possible replacement of the deceased ‘Key Person’ is found.
Whether you require a mortgage to buy a new property or to refinance an existing property, it has never been as complicated or challenging to navigate through the options and eventual bank’s underwriting process. Having an experienced mortgage broker to help you with the project will certainly reduce the stress, save you time and save you money.
The key reasons to instruct a mortgage broker or financial adviser who specialises in mortgages:
A mortgage broker that you instruct represents you. He or she has no allegiance to the estate agent or vendor you are buying through or from.
- Product knowledge
Whilst borrowing money is all about finding the cheapest rates there are subtle differences between mortgage products that you may or may not understand. Having an expert guide you through how best to use product features can lead to savings in the long term.
An experienced mortgage broker will have dealt with many cases before and should know the type of properties to avoid, give tips on negotiation and provide some background to the legal pitfalls that can delay or stop a purchase in its tracks.
- A smooth journey
The person arranging your mortgage has the most detailed knowledge of any professional involved in the transaction.
Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it.
YBC Financial is a trading style of Holder & Combes Ltd., which is registered in England: 6566662. Registered Office: 20 Little Britain, St. Paul’s, EC1A 7DH. Holder & Combes Ltd. is authorised and regulated by the Financial Conduct Authority - Firm Reference Number 574786.