The death or serious illness of a partner can have major repercussions for the future of your partnership. It can cause immediate financial hardship for the remaining partners and maybe even loss of control of the business. In essence, the death or serious illness of a partner can potentially jeopardise the future of your business and can have major implications for the remaining partners.
Putting Partnership Insurance in place can benefit both the remaining partners and the deceased partner’s next of kin:
- A capital lump sum will be provided to the remaining partners to buy back the deceased partner’s share of the business, ensuring the remaining partners retain full control of the business.
- The deceased’s next of kin can rapidly realise the value of the deceased partner’s share of the business for a capital lump sum.
- The remaining partners can inherit the deceased’s share of the business without having to incur inheritance tax.