What is Shareholder Protection
Shareholder protection allows business owners to buy shares back from any partner who is diagnosed with a critical or terminal illness, or dies. This policy helps surviving owners stay in control and minimises disruption to the business.
The sum insured is usually based on the amount of capital the remaining partners would need to buy out their outgoing colleague’s equity in the company.
Shareholder protection policies pay out a lump sum upon the death of the insured person, if they’re diagnosed with a terminal illness and given 12 months to live, or contract a critical illness or injury (that’s covered by the policy) and are forced to leave work as a result
What are the benefits ?
How Does It Work
What Is A Cross Option Agreement
A cross options agreement is an arrangement between the remaining shareholders and the insured person’s estate. It sets out who will buy the shares and at what price if the insured party was to pass away or leave the company due to serious illness.
Also known as a double option agreement, these agreements allow the surviving shareholders to decide who will buy what percentage of the equity and gives the insured’s beneficiaries the peace of mind that comes with knowing exactly how much it will sell for.
We will help guide you and your business through the process so that you and your business will be sufficiently covered.