First of all, it is important to understand who needs partnership insurance and who doesn’t. If the owner of a business is an individual/sole owner, it is crystal clear that they don’t need this insurance since they don’t have partners in ownership of the company. It is for those who run a business with one or more partners that this insurance matters and should look into it. Sole business owners don’t need partnership insurance since they don’t have a partnership to protect.
Partnership protection insurance plans are very important for business run by two or more partners because this insurance plan provides safety measures to the partners in case of a serious illness to one of the partners or if he/she becomes permanently disabled or in cases of untimely demise.
In case of an unfortunate death of one of the partners, the partnership protection insurance allows the rest of the partners to buy the shares of the deceased partners from the next of kin whomever inherits it. Although if one of the partners is bed ridden due to serious illness or permanently disabled, the insurance policy allows the other partners to purchase the shares from the partner himself.
The common thing among partnership protection insurance and the other insurance policies is that you need to imagine and consider unpleasant things to evaluate whether you need that insurance cover or not. That means you need to consider the deadliest of problems happening to your dear ones, probability of sickness and even death. Imagining all this happening to one’s partner can be heart wrenching and excruciating but that’s how you get to understand the aftermath of it when it actually happens. However, at the end of the day, going though that thought process is only a trait of being a good and professional business owner.
This also makes the employee want to work for that company for longer than usual. The maturity amount of the insurance or benefits after death are completely tax free and belongs only to the employee. Employer-employee allows the employer to buy any kind of insurance under this policy. This policy more often used to insure lives of employees.
Partnership protection insurance is one of those policies that requires you to consider things that are not at all pleasant. Having to consider the possibility of critical illness, permanent disablement or death befalling you or your partner/s is particularly confronting. However, having a plan in place should something like that happen is all part of being a responsible business owner.
The process of concluding whether you need partnership insurance or not is quite similar to the process of other insurance policies. To begin with, you need to weigh the advantages and disadvantages of the policy and relate it to your current situation. If the insurance provider has impressed you with added protection advantages and benefits, it means it is time to take it to your partners and discuss whether the company needs it or not. It is mandatory to keep in mind your financial situation as individuals and also the economic viability of the company if it has to go through an unexpected incident. If you still are not sure about getting a partnership protection insurance, get the advice of a financial advisor.
Taru Financial Services will be glad to guide you through the pros and cons of partnership insurance and evaluate the best policy for you depending on your personalised situation.
Partnership insurance is generally important for businesses with multiple owners. There are many benefits that come along with this insurance that helps with the smooth functioning of the business.