Share holder
Introduction to Shareholder Protection Insurance
There are many options available to protect your employees, however could your business survive if key staff members or directors were no longer around?
Providing your business with a vital safety net if it was ever to lose a shareholder through serious illness, injury or death with a Shareholder protection plan. A step by step guide on how this agreement works, and how to setup how and make an application.
What is shareholder protection insurance?
This type of Business protection insurance provides shareholders with funding to be able to buy shares from an other shareholder, if that shareholder became serious ill, had an accident or died. These policies are typically based on a life insurance structure however critical illness can be added as an additional option.

Common reasons why businesses would take out Shareholder protection are:
  • Having the ability to buy shares from a shareholder that dies or becomes critically ill.
  • Helping the shareholders family or beneficiaries sell shares at a fair price with limited complications on the transaction.
  • Provide an income to a critically ill shareholder without the need to return to work.
  • Offering a tax efficient method to transfer ownership of shares following a shareholder becoming critically ill or in the event of a death.
How does shareholder protection work?
The sum insured is usually based on the capital the remaining partners would need to buy out the shareholders equity within the company.
Shareholders or the business can take out policies to insure the lives of each individual shareholder, giving protection to all. If a claim is made within the duration of the plan a lump sum would be paid out to allow the policy holder to buy shares from the critically ill shareholder or there beneficiaries. Legal agreements are drawn up stating how the shares would be managed in the event of a death or a critical illness. The amount a business would need to pay would depend on the levels of risk the provider thinks they are taking by providing this protection. Calculations are based on the age, lifestyle and whether they have a pre-existing medical condition.
Within the UK there are usually three types of shareholder protection which depend on what the business needs and also it’s size.
A “Life of another” policy is a popular method when assigning benefits to somebody. This can be used when a company is owned by two shareholders. Each shareholder would take out a plan which covers the life of the other, representing the value of a partners share in the business.
“Share purchase insurance” enables the business to take out a policy for all of it’s shareholders, matching the value of their owned shares. In this instance rather than the individual receiving the payout the funds will then be used by the business to buy these shares back retaining control.
“Own life policy” help in a business trust can be an alternative to a business share purchase option involving shareholders taking out personal policies and holding them within a business trust. In the event of a shareholder passing away the remaining shareholders would be able to use the payout to purchase these shares.
How shareholder protection policies are setup?

Working out the level of cover is one of the initial steps needed when considering shareholder protection. Talking to all the shareholders and support from the finance director will give a clear understanding of the capital to buy out the insured’s equity.

The application process will require all individuals personal information which consists of age, lifestyle and information of any pre-existing medical conditions. This information will be presented to the insurance providers to calculate premiums. To ensure the very best cover we will request quotes from all appropriate providers. Our qualified experts will give you advice with a recommendation for the most appropriate cover.
The majority of people are more likely to become serious ill than pass away suddenly. Critical illness cover can give peace of mind. Shareholder protection plans that only include Life cover are usually 3 to 4 times less expensive than with critical illness added to the policies.
For limited liability companies shareholders can take out protection insurance if the company is limited liability partnership (LLP). The products offered would not be any different to policies available to businesses with a shareholder structure. The majority of advice would recommend all small businesses to be protected, as they are generally less equipped to raise the capital required.
Who would normally pay for the premiums when taking out a shareholder protection plan?
It is generally the business that would cover the premiums and who would receive the proceeds of the plan. In turn the business or shareholders can then proceed to purchase the shares from the leaving

Arranging shareholder protection can be a time consuming process. Obtaining personal information from the individuals being insured maybe challenging as they can often wish to discuss this discreetly with an appointed adviser. The process is also complicated by insurance providers differing in the information deemed necessary. After the application is submitted there are occasions where it can be referred to the underwriters who may come back with additional questions. We would always suggest using a qualified regulated adviser that has experience in setting up these types of insurances. We have helped many businesses with applications and drafting suitability reports that will explain all costs involved and the reasons why the particular provider has been chosen and also the costs incurred with this protection. Our review will not cost you or your business to get regulated advice on share protection policies. If you decide to proceed the chosen provider would usually pay us a set amount which will be mapped out clearly in the terms of business between you, the provider and us.

Comparing key person insurance quotes and securing the best cover for your business.


When finding the most suitable Key Person Insurance it is important to speak to competent protection specialists that can provide you all the information needed to maximise policy protection whilst working within company budget.

We are regulated to give advice and experienced to help you decide what is right for your business. We work within budgets and only use the UK's very best insurance providers.

We do not charge for arranging quotes and reviewing policies we may only receive a fee from the chosen provider if you did decide to take a recommendation from us.

All advisers are now able to conduct reviews via telephone with documentation being emailed and posted. We are here to help you with any questions you may have our friendly team are experienced and will ensure the upmost care is taken when advice is given.

About Us
We are regulated to give advice and experienced to help you decide what is right for your business. We work within budgets and only use the UK's very best insurance providers. We do not charge for arranging quotes and reviewing policies, we may only receive a fee from the chosen provider if you did decide to take a recommendation from us.  

All advisers are now conducting reviews via telephone with documentation being emailed and posted. We are here to help you with any questions you may have our friendly team are experienced and will ensure the upmost care is taken when advice is given.

Our aim is to be clear and simple with you making the process hassle free and relevant to your objectives. We will always ensure you are left knowing all of the benefits surrounding our recommendations and the costs involved. We always search the whole of market and are not tied to any one provider meaning you will know exactly what is right for you and your business partners.
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