Business Owners

The Background

Two business owner directors (50:50 owners). Both male mid 40’s – married with young children.

The Issues:

• Business solid and growing quite young
• Taking modest salaries for the time being
• Only small pension funding but intend to fund more aggressively in future as business grows
• Big concern now – Protection issues 
  – Life cover – only mortgage cover in place – no ‘family protection’ in place
  – No ‘income protection’ if unable to work due to illness or injury
  – Worried what would happen shareholding if either died suddenly
• As only taking modest salaries, funding these covers personally is expensive

The Solutions:

• Set up the following covers

1. Company Directors Life insurance on both for €250k each.
Cost – c€55/mth – paid by company.

2. ‘Keyman Serious Illness cover for €75,000 on each.
Cost – c€75/mth – paid for by the company.

3. Pension Term Life assurance as ‘Family protection’ on both for €500k to age 60.
Cost €65/mth for each, paid by company as a trading expense (12.5% corpo tax relief) but no BIK paid by directors.

4. Income protection (PHI) on each director for €36,000 (€3,000/mth) payable after 26 weeks deferred period, to age 60.
Cost €66/mth for each, paid by company as a trading expense (12.5% corpo tax relief) but no BIK paid by directors.

Will review all in 3 to 5 years depending on how business is going.