What is Partnership Insurance? Do I need it?

partnership insurance

Partnership insurance is a well-designed insurance plan for businesses that are run by two or more partners.

In the UAE, numerous businesses are set up as partnerships. However, rarely do the partners realize the implications of what would happen to the business and the family members if one of the partners gets severely ill or dies. Would the business suffer a loss either through reduced revenues or monies stuck in the market? Would the deceased partner’s shares get passed on to their next-of-kin who may not be interested in running the business at all or might not have business acumen and technical skills to support the business like the previous partner?

Fortunately, policies like partnership insurance allow for partners to be ready for this eventuality. This type of insurance also safeguards the business in the scenario where one of the partners survives the accident or illness but chooses to leave the company.

Is it necessary to buy partnership insurance?

Understandably, no one wants to think about tragic events while running a business with a partner. But, not planning for it properly might result in undesired outcomes after an unfortunate event in the future. Not being prepared for such events means your business can fall apart quickly once your partner gets out of the business due to any of the following reasons.

Death

In case of the death of one of the partners, a partnership insurance plan will give the business a cash payout. It will allow the remaining partners to buy the shares back from the family of the deceased partner to regain full control and business continuity. This is beneficial for the deceased partner’s family as well as they are able to liquidate their holdings in the business and live a dignified life in the absence of their family member.

In addition, this lumpsum payout enables the remaining partners to find a suitable replacement (partner or an employee) and bring him/her on board without worrying about hefty salaries as the business will have the luxury of cash sitting in the bank account.

The cash flow resulting from the death of a partner, into the business, also gives confidence to the vendors, clients, and other business partners that the business will be able to tide over difficult times and come out stronger on the other side.

Critical Illness

If one of the partners falls critically ill, then a cash payout is made to the company. This helps the business in many ways. Firstly, it enables to critically ill partner to get medical attention and be able to take the time off without a significant impact on his personal finances. In addition, if the partner needs to take a medical leave of absence or is working with the company at reduced capacity, it enables the business to hire the necessary people for the business operations to go on as smoothly as possible.

In short, a partnership insurance policy is a guarantee that your business would be least impacted by the death or illness of a partner and that the business can carry on its operations profitably.

At New Age Insurance Brokers LLC, you will find the most trusted insurance advisors who will help you to make sure that your business remains protected should any partner of your business get out of the equation. To know more about partnership insurance, feel free to contact us at info@newageib.com.

Why The Rich Need Life Insurance

Life Insurance

High-value life insurance is a secure and unique insurance plan especially designed for high net worth individuals like yourself who are business partners, directors, and large business owners, having large illiquid assets such as large real estate investments, machinery, accounts receivables, etc.  This type of life insurance plan provides massive amounts of coverage from USD 1 million up to USD 200 million. It provides the opportunity for you to develop a very large asset base and offers guaranteed minimum accumulation benefit protecting you from market fluctuations.  In a nutshell, life Insurance for HNWIs/UHNWIs is recommended so that they / their families/businesses continue to run at the same level of comfort and guarantees that they are used to.

Why should high net worth individuals buy high value life insurance policy?

As an HNWI/UHNWI individual, your needs are unique and hence only bespoke solutions are appropriate for you. These high-value insurance plans can be designed to meet your individual needs. Some of the reasons why one should consider a high-value life insurance policy are as follows:

Business Continuity

High-value life insurance can help your business when insurance is taken on all the partners or keyman and the company pays for it.  In the event of a claim, claim proceeds come to the business and can be used by the surviving partner to pay to the deceased partner’s successors towards buy out of his share in the business.  In this way, there is no cash stress on the business to pay off the deceased partner’s family and continue running the business.  In a sole proprietorship business, the family gets liquidity in the business and is not having to rush to sell the assets to pay running expenses or short-term/long-term liabilities.  The cash payout helps the business to remain stable and gives time to the family to consolidate the business and carry on profitably.

Structuring Tax and Other Liabilities

It is vital for you to make sure that your estate has the liquidity to pay debts and estate taxes. In case the estate is expected to exceed the exemption amounts, planning for tax liabilities becomes important because paying off federal tax can be cumbersome and is typically due within the year of the estate holder’s death date. High-value life insurance can play a vital role in paying off estate taxes.

Legacy and Estate Planning

Estate planning is not only about estate tax avoidance/reduction, but it is also about taking care of family, dependents, and dealing with complications of transferring business, real estate, privacy protection, creditor protection, probate cost avoidance, and so on. A high-Value policy helps you fairly divide your assets amongst your successors.  For example, if one of the children is not interested in joining the business, then life insurance proceeds can go to him/her and another child gets full control of the business. Legacy planning involves a lot more than estate planning. Rather than planning for “when I am dead”, it involves developing plans for things you value, the beliefs you have, the people you love, and passing all these to successive generations. A high-value life insurance can help you realize these plans in a much better way by providing the financial security you need. Apart from this, keyman protection, wealth preservation, and charitable giving are also other key objectives of buying jumbo life insurance. To conclude…

The very definition of rich implies that one is wealthy and has a great deal of money or assets. And that is typically the reason why a high net worth individual, like yourself, might undermine the importance and need for life insurance. You may assume that you already have enough wealth to protect your business and family, in case of your sudden demise or a slowdown of business due to a critical illness that you may suffer from. However, as experience has shown us and hopefully, we have been able to convince you, that is not always the case. A jumbo life insurance policy plays a very important role in estate planning as well as providing immediate liquidity to your family and/or business in case of your death or if you are diagnosed with a critical illness. Our wealth of experience in this domain will ensure that you, your assets, and aspirations are well protected and transferred onto future generations or executed as you wished it to be. To learn more about high-value life insurance, please contact us at info@newageib.com

5 common myths of travel insurance that you need to be aware of!!

Travel Insurance

What do you do when you are on a vacation and an unavoidable medical emergency happens? You will probably contact your relatives and friends for help or will visit the local medical authorities for treatment. How do you take care of the related expense? Your medical insurance does not cover you outside your country of residence. A very inexpensive travel insurance can help you deal with these and other unfortunate events that might happen while you are on a vacation.

It is this type of insurance that will help manage many uncertainties associated with travel. The insurance will cover the emergency medical costs in case of an accident, assist if your traveling document if lost, manage costs related to canceled and missed flights and many more. Overall, travel insurance will be a protective layer for your journey.

The benefits are several but there are some myths in the minds of the people that prevents them from using the same. Let’s discuss these myths and bust them.

 

Myth 1#

Medical insurance or other life insurance is enough

Medical insurance will look after all your medical issues only if it covers the countries you are traveling to. Typically, medical insurances are not sufficient. Not only that, what about other problems that you may face in the journey. Travel insurance will cover a lot more than medical issues.

 

Myth 2#

You have to take an individual policy for everyone in the family if traveling together

If you are traveling with your family, you can choose a family policy that covers all family members which includes family children below age 16. In addition, if you travel regularly with your family, you can choose an annual policy and use it whenever you plan your vacation. However, a ‘family’ policy can be invalid if family members are travelling independently or if the children are travelling with someone not named on the policy.

 

 Myth 3#

Can buy insurance later

People wait for the last minute to take the policy or after they have travelled because they are afraid of the premium amount. The premium amounts don’t change whether you purchase in advance or last minute. Also, the difference in premium amounts before you have travelled and after you have started your journey is minor and not worth the risk. We highly recommend taking the policy at the time of booking your trip.

 

 Myth 4#

Travel insurance is just for adventurous people

Some people love adventure and high-risk sports and activities during their travels. But it does not mean that they are the only ones should avail travel insurance. The terms and conditions are different for different travelers so even if you are not into adventure sports, you can apply for travel insurance. Such a policy will cover you against various travel risks such as lost or stollen luggage, cancellation cover (should you not be able to travel due to unexpected medical reasons) and most importantly, unexpected medical costs abroad.

 

Myth 5#

Filing for a claim is difficult

While you are away from your home and need to file a claim under your travel insurance policy, people often think that it is difficult to contact the insurance company. They also have the mind-set that the response will be delayed. However, if you have bought a travel insurance from a highly rated insurance company, you will not have trouble reaching the insurance company or filing a claim with them.

 

So now that we have busted some myths around travel insurance, make sure that you carry it along with you in your next adventure. You can also reach out to us at info@newageib.com to learn more.

Critical illness protection secures your family’s future

critical iillness policy

Most people shy away from the subject of insurance, even though it’s simply a risk management tool against unforeseen circumstances. Some find the numbers involved overwhelming, while others believe that insurance is strictly limited to life, cars, homes and retirements. While home and life insurance are the most common policies, there are other essential policies that individuals must explore to secure their future.

Critical Illness protection is one such policy that needs to be demystified.

Critical Illness is defined as being diagnosed by a life-threatening disease such as heart attack, stroke, cancer, Parkinson’s disease, Alzheimer’s disease, brain tumor, multiple sclerosis, renal failure, paralysis, blindness or deafness. An individual affected by any such conditions doesn’t suffer only from emotional or physical distress, but it is likely they will feel under financial duress too.

Critical illness protection is what we call a ‘living’ benefit insurance. Unlike life insurance, which pays in case of death – I haven’t come across anyone who needed money after death — a critical illness protection policy pays you money when you are alive. It protects your most valuable asset, your income.

The probability of someone being diagnosed with a critical illness before the age of 65 years is far greater than death. All the savings that you may currently be setting aside for your old age or your children’s education may not be available if you or a family member is diagnosed of a heart attack, cancer or another critical illness.

Let’s look at a case study to understand how critical illness can sneak into your life, uninvited.

Rakesh and his wife were happily married with two children and residing in Karama. With their combined income of Dh27,000 per month, the couple was saving Dh3,750 after taking care of expenses such as rent, education, food, bills etc. They had even invested in a property, a 1BHK apartment, in International City. Life was progressing decently well for this family of four until Rakesh suffered a heart attack.

He had to undergo bypass surgery and was hospitalised for a week after discharge and advised 90 days bed rest.

Bypass surgery and medicines — Dh160,000.

Rakesh’s wife on leave for three weeks.

Rakesh on leave for four months.

With the collective income of the household now on hold, how do Rakesh and family tackle the future?

This hypothetical scenario has been a nightmare reality for several families and individuals around the world. Critical illnesses are unpredictable in nature and can affect an individual anywhere, at any time. In Rakesh’s case, all his issues would have been better handled had he invested in a critical insurance policy.

The first reaction to being diagnosed is disbelief, followed by shock, sadness and anger, finally boiling down to the stressful questions of managing the treatment expenses. We all have enough worries in our lives; paying the bills if we get sick shouldn’t be one of them. This is why it is worth noting that managing a critical illness without proper cover could result in:

  • Loss of income.
  • Increase in household expenses.
  • Childcare expenses.
  • Shortfall between income and expenses.
  • Retirement savings wipe out.
  • Education fund of children wiped out.
  • Sale of ancestral property at a loss.

Additionally there are the expenses of a private nurse in extreme situations, the home renovations to accommodate the new lifestyle, special transportation, non-covered experimental treatments and other medical expenses that are not covered by a standard insurance policy.

For someone battling a critical illness the expenses increase and income goes down. At that time it is more important to spend time with the family, spend time recouping and not worrying about finances. Worrying about finances could be one of the reasons causing a heart attack in the first place and is quite often one of the reasons of having a relapse while recovering.

While the potential recovery depends on the individual’s determination and family support, a comprehensive critical illness protection insurance policy will surely assist by alleviating the financial worries associated with these illnesses. The policy may not help with the emotional pain but it will certainly help ease the financial pain associated with surviving critical illness.

The right critical illness protection policy can provide you up to Dh4,600,000 on diagnosis of any of the covered illnesses.

Here are some statistics to get you thinking about securing you and your family’s financial future in the event of sudden critical illness.

  • The UAE has the second highest rate of diabetes in the world.
  • Cancer is the third leading cause of death in the UAE after cardiovascular disease and trauma.
  • Smoking, stress, junk food and lack of exercise are creating heart-disease patients in the UAE 15 years earlier than in the west.

A critical insurance protection policy is planned to protect you and your family from unforeseen circumstances. Monthly investments towards the insurance policy can range from Dh65 upwards, depending upon age, the cover amount and health and lifestyle of the individual.

How often do you go on holidays and for how long? For 15 days, a month? Have you gone on a three-month holiday? Quite often people say they can’t afford it. One day your doctor could ask you to take a three-month holiday. How will you afford it then?

Here is another example for you to ponder over — your salary is Dh25,000 a month. Your employer offers to pay you Dh24,000 a month and gives you two options for the Dh1,000 per month being deducted.

  1. In case you fall sick with a critical illness, he’ll continue to pay your salary for one year while you recover and provide you your job on recovery

or

  1. He will return the deducted amount to you in 15 years, which amounts to a saving of Dh180,000.

Would you opt for such an option?

Protect your savings, your wealth, your portfolio, your financial future by ring fencing it with a critical illness protection plan.

Like a healthy lifestyle, critical illness protection can be your biggest gift to yourself. Talk to us or e-mail us at info@newageib.com to learn more.

Professional Indemnity Insurance: what all does it cover and benefits it offers!!

Professional indemnity insurance

Professional Indemnity Insurance is a type of business insurance for companies that offer professional services or consultations to their clients. It covers legal fees and compensation payments when a business issued by its clients and customers for a mistake the company has made in rendering its services. The coverage offered by the insurance company primarily focuses on the failure of the work or service delivered by the company that has resulted in a financial loss for their client. Professional indemnity insurance also covers businesses for mistakes including unforeseen breaches of confidentiality, professional disregard, loss of data and documents, and issues of copyright.

It does not matter whether you have a cordial relationship with your clients; a mistake small or big may potentially ruin the business relationship between you. Thus it is very crucial to take up professional indemnity insurance for your business’ sake and protection of its reputation.

Besides the above, there are many more benefits that come with Professional Indemnity Insurance.

Advantages a Professional Indemnity cover offers:

With a plethora of benefits, professional indemnity insurance is becoming more and more popular among business owners these days. Here’s a list of the key advantages that it offers.

  1. Regulatory obligations and requirement by clients

For some professions such as Lawyers and Doctors, having a Professional Indemnity cover is required by their respective regulatory bodies. In such cases, it is a mandatory requirement for a professional to have a PI cover.

In addition, most clients also require that their suppliers etc. have a professional indemnity cover before they hire them for any professional services. This is so that in case there is an error or omission by their supplier, they know that they will be financially reimbursed in case of a loss caused by the supplier of the services.

In short, having a PI cover is a requirement for some professions by law and for other professions, clients demand that their suppliers are covered.

  1. Financial safety from lawsuits:

Financial losses from litigations can throw a wrench, in the otherwise smooth functioning of your business. But, if you are covered with this insurance, the defence cost including court costs, lawyer fees, cost of filing the legal documents and so on – are covered by the insurer. Typically, it acts as a financial shield to meet legal fallouts against claims and omission mistakes.

  1. Increases trustworthiness of your business:

Professional indemnity insurance potentially enhances your reputation and goodwill. It gives your investors and clients the confidence that whatever services you are offering, if there are some errors, then professional indemnity insurance will provide the requisite coverage. As a reputed business owner, you are responsible for your services, and if you have invested in this insurance, you let your clients feel more confident and satisfied with doing business with you.

And above all, it gives peace of mind.

Performing consultation services with greater confidence and without stress brings great results. But if you are held liable for financial or even reputational loss because of your consultation then the whole situation puts a great burden on your business. Professional indemnity insurance, on the other hand, provides great help in such scenarios and tackles your stress by offering monetary help.

So, there you have it- the benefits you and your business will attain with the coverage of professional indemnity insurance.

But, to ensure that you get all the possible advantages and to make the most of your insurance coverage you must choose the right insurance provider. You should carefully consider the following when selecting a professional insurer.

  • Consider the experience of the professional insurance provider. Make sure the insurer you choose can provide the right coverage for your kind and size of business.
  • Check the credit rating of the provider which will indicate whether the provider will pay valid claims.
  • Check the claims servicing department to see if they have reasonable TATs for claim payments.
  • Verify whether the insurance provider is capable enough to offer adequate policies as you grow your business regionally and globally.

The success of your company is the result of your efforts and hard work, and it is imprudent to think that mistakes will not happen in the future. Therefore, protecting your business with professional indemnity insurance is an absolute need and is worth it.

Talk to an advisor at New Age Insurance Brokers who can guide you through the process of designing the right coverage and negotiating best rates and terms for the same.