Insurance

Insuring against the unexpected

Term life cover is essential in most lending situations to provide the security and peace of mind, that in the event of death any loan liabilities will be repaid.

• The fact that the main borrowing has been repaid will reduce the financial pressure on the business and enable a sale to be pursued at a leisurely pace with a realistic figure being obtained.
• Whilst we do not insist that customers take cover through our own brokers they are able to provide very competitive quotations, quickly.
• There are several different types of term insurance cover and the main ones are summarised here. Which is appropriate for your particular situation may only become apparent after discussion, or perhaps the cover should be provided under more than one policy.
• Term assurance rates have fallen over the last few years and even if no new cover is required at the moment, it may still be worthwhile reviewing your requirements as it may be possible to address them at lower cost.
• One important point to bear in mind. If you are trading as a limited company, then the company should take out the insurance on your life. If you take out the cover yourself, then not only will you have to pay tax & N.I. on the salary you withdraw to pay the premiums but the proceeds of the policy will form part of your personal estate when you die and may become liable for inheritance tax.
• If it is written 'in trust' i.e. for the benefit of the company, then the premiums are paid by the company. When you die the proceeds will repay the company loan directly and not form part of your personal estate. It may be better for the company not to claim tax relief on the premiums, to avoid Corporation Tax on any receipt.

Reducing term assurance

The sum assured will reduce over the policy term to reflect the reducing capital outstanding on the repayment loan. This will probably be the lowest cost of these options.

Level Term Assurance

The sum assured will remain level over the policy term and this cover will cease at the end of the term. Worth considering if it is your intention to acquire further pharmacies in the future. It may be cheaper in the long run to take out level term cover now (whilst you are younger) rather than buy further reducing cover in the future (when you will be older)

Keyman Assurance

As for level term assurance but the policyholder and life (lives) assured are different. For example you, as the owner, may wish to insure the life of a key individual in your business whose loss may seriously affect the business.

Convertible Term Assurance

As for level term assurance but the convertible version allows you to convert to a whole life plan at any time during the term.

Whole of Life Assurance

Designed to provide a cash lump sum when the insured dies, whenever that is. The sum assured can be level throughout, it can be indexed to increase each year and it can be subject to a 10 year review (when the sum assured will significantly reduce or the premium significantly rise.)

Statim is able to obtain competitive quotes for all types of Term Life cover, through Richard Boddie of BFS Co. Richard is an independent broker who provides a bespoke service to his clients and who has many years experience working with pharmacists.

He, or one of his team, can be contacted on: 01273 495446.

Alternatively send an e-mail to, office@bfsco.com providing a contact telephone number and an outline of your requirements and he will contact you direct.

Buildings Insurance

You must ensure that your premises and your business and its contents are adequately covered against the usual disasters of fire, flood and theft and not to do so is false economy. You must also carry employee and customer public liability cover. All the major insurance companies offer a 'shop' type policy which covers most of the eventualities for which a high street retailer needs to be covered. However, the NPA through The Pharmacy Mutual Insurance Company Ltd. offers a comprehensive policy which is specifically designed for pharmacists and which is competitively priced and well worth considering. Contact the PMI direct for further details.

http://www.p-m-i.co.uk/