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  Business Assurance
Business Assurance is a form of protection a business can take out to protect itself from potential dire financial consequences should some person that is critical to the contingency of the business die or become disabled. The purpose of Business Assurance is to ensure that a business remains a going concern after an unplanned event such as Death or Disability.

Key Man Assurance

Key Person Assurance is essentially a policy taken out by the business and paid for by the business on the life of a key person or employee. If the key person were to die or become disabled the policy will pay a lump sum to the business. These funds can then be used to finance the business during the time that a replacement for the key person is found or trained.

Buy and Sell Insurance and agreements

The majority of businesses today are exposed to risk with relation to people who manage their enterprises. If an enterprise or individual is not adequately protected against the disability or death of its managers it could face various risks.

In the event of the death or disability of a Partner or Shareholder, it is vital that provision is made for the sale of the deceased's interest in the business and that sufficient funds are available to the survivors to purchase the deceased's interest or share. In so doing, each partner is guaranteed that on his death, his estate or beneficiaries will receive a fixed and determined amount for his share.

Usually the proceeds of a policy forms part of the estate of the deceased. Key Person and Buy and Sell policies however do not form part of the deceased's estate and thus the estate does not have to pay any taxes on this payout. There are however some technical rules that must be adhered to for these policies to be treated as such and if these conditions are not met the policy will be taxed in the deceased's estate causing unnecessary expenses and taxes. It is therefore imperative to work with a DSA Advisor to ensure that Business Assurance policies are structured correctly with the lowest impact to the deceased's estate.

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