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Shareholder Protection for Accounting Firms

WeCovr Editorial Team · experienced insurance advisers
Last updated Mar 17, 2026
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Shareholder Protection for Accounting Firms 2026

TL;DR

WeCovr provides expert guidance on Shareholder Protection life insurance for UK accounting firms, ensuring business continuity and a fair value transfer for partners. Our specialist advisers help you compare quotes and structure plans compliantly.

Key takeaways

  • Shareholder Protection uses life and critical illness insurance to fund a share buyout upon a partner's death or serious illness.
  • A Cross-Option Agreement is essential, creating the legal framework for the surviving partners to buy and the estate to sell the shares.
  • This strategy ensures business continuity, protects the financial interests of all partners, and provides fair value to the departing partner's family.
  • For UK tax purposes, using a Cross-Option Agreement typically preserves valuable Business Property Relief for Inheritance Tax.
  • Regular valuation of the firm and review of the protection plan are critical to ensure the insurance cover remains adequate.

Ensuring business continuity and fair value transfer between senior CPA partners

For any successful accounting firm, the senior partners are its most valuable assets. Their expertise, client relationships, and strategic direction are the bedrock of the practice's value. But what happens if one of these key individuals is suddenly no longer in the picture?

The death or serious illness of a shareholder in a professional services firm creates a profound and immediate crisis. Beyond the personal tragedy, it poses a direct threat to the firm's stability, financial health, and future.

  • The Deceased Partner's Family: They inherit a valuable asset—shares in an accounting practice—but have no desire or ability to participate in the business. They need to liquidate this asset to secure their financial future.
  • The Surviving Partners: They are left with a critical gap in leadership and a new, inactive "partner" (the deceased's estate). They need to regain full control of their business, but may lack the personal funds to buy out the shares at a fair market value.
  • The Business Itself: It faces a period of intense uncertainty. Clients may become nervous, credit lines could be reviewed, and the firm’s focus is diverted from serving clients to resolving an internal ownership crisis.

This is not a hypothetical risk. It is a predictable business challenge that, without a formal plan, can unravel a lifetime of hard work. Shareholder Protection Insurance is the definitive solution, providing the capital and legal framework to navigate this crisis smoothly and fairly.

This comprehensive guide explains how shareholder protection works specifically for accounting firms, ensuring business continuity, a fair value transfer, and peace of mind for all stakeholders.

What is Shareholder Protection?

Shareholder Protection is not a single insurance policy, but a strategic arrangement designed to ensure a seamless transfer of company shares if a shareholder dies or is diagnosed with a specified critical illness.

It consists of two essential components working in unison:

  1. Insurance Policies: Life insurance policies, often combined with critical illness cover, are taken out on the lives of each shareholder for an amount equal to their shareholding's value.
  2. A Legal Agreement: A shareholder or cross-option agreement is drafted. This legal document creates a binding framework that compels the surviving shareholders to buy the shares and the deceased shareholder's estate to sell them.

When a triggering event occurs (death or diagnosis of a critical illness), the insurance policy pays out a tax-free lump sum. The surviving partners use these funds to purchase the shares from the deceased's family at a pre-agreed, fair price.

The result is a clean break that benefits everyone:

  • The surviving partners retain 100% control of their firm without using personal savings or taking on debt.
  • The deceased partner's family receives the full cash value of their loved one's shares, quickly and without dispute.
  • The business continues to operate with minimal disruption, preserving its value and client confidence.

Shareholder Protection provides the one thing that is priceless in a crisis: liquidity and certainty.

How a Shareholder Protection Plan Works: A Step-by-Step Guide

Setting up a robust shareholder protection plan involves a clear, logical process. At WeCovr, we guide our clients through each stage to ensure every detail is addressed correctly.

  1. Valuation: The first and most critical step is to determine the value of the business and, consequently, the value of each partner's share. For accounting firms, this often involves a formula based on a multiple of recurring fee income or profits (EBITDA), rather than just net assets. This valuation must be realistic and agreed upon by all shareholders.

  2. Agreement on Structure: The shareholders decide on the structure of the plan. This includes agreeing on the legal framework (typically a Cross-Option Agreement) and the method of owning the insurance policies.

  3. Insurance Application: Each shareholder applies for a life insurance policy (with or without critical illness cover) for the value of their shares. For example, in a £2 million firm with four equal partners, each would need a £500,000 policy.

  4. Trust-Based Planning: The policies are typically placed into a specially designed Business Trust. Each shareholder places their own policy into a trust for the benefit of the other shareholders. This is a crucial step for tax efficiency and ensuring the funds are directed correctly and paid out quickly, bypassing probate.

  5. Drafting the Legal Agreement: A solicitor drafts the Cross-Option Agreement. This document codifies the arrangement, giving the surviving partners the 'option' to buy the shares and the departing partner's estate the 'option' to sell them. These options become exercisable upon a claim event.

  6. Regular Reviews: The plan is not a "set-and-forget" solution. The firm's value will change over time. The plan, including the insurance sum assured and the valuation formula in the agreement, should be reviewed annually or biannually to ensure it remains fit for purpose.

A Real-Life Scenario: An Accounting Practice in Action

Let's consider "Abacus Accountants Ltd," a successful practice with three equal shareholders: David, Emily, and Frank.

  • Valuation: The firm is valued at £1.8 million.
  • Shareholding: Each partner's share is worth £600,000.
  • The Plan: They establish a shareholder protection plan. Each partner takes out a £600,000 life and critical illness policy on their own life, written into a business trust for the benefit of the other two. They sign a Cross-Option Agreement.

The Trigger Event: Tragically, Emily is diagnosed with cancer at age 52 and is unable to continue working.

The Solution in Motion:

  1. Insurance Payout: The critical illness policy on Emily's life pays out £600,000 into the business trust.
  2. Funds Distributed: The trustees (David and Frank) receive the funds, tax-free.
  3. Option Exercised: As per the Cross-Option Agreement, David and Frank exercise their option to buy Emily's shares. Emily's side exercises the option to sell.
  4. Share Purchase: David and Frank use the £600,000 to purchase Emily's one-third shareholding.
  5. The Outcome:
    • Emily receives £600,000 in cash, providing her and her family with complete financial security to focus on her health.
    • David and Frank now own 100% of Abacus Accountants Ltd, with no debt and no external interference.
    • The business continues seamlessly, reassuring clients and staff.

Without this plan, David and Frank would have had to find £600,000 from their own resources, take on significant business debt, or face the prospect of a protracted and damaging dispute with Emily's family.

The Core Components Explained in Detail

A successful plan hinges on getting the two main components—the insurance and the legal agreement—perfectly right.

1. The Insurance Policies

The insurance provides the capital to make the plan work. The choice of policy is vital.

Life Insurance This is the fundamental cover. It pays out a lump sum if the insured person dies during the policy term. For shareholder protection, Level Term Assurance is the standard.

  • What it is: A policy that pays out a fixed lump sum (the 'sum assured') if the insured person dies within a set number of years (the 'term').
  • How it works: You choose the amount of cover and the term (e.g., to age 70). If the shareholder dies within this period, the policy pays out. If they survive the term, the policy ends and has no value.
  • Why it's suitable: It provides a guaranteed, cost-effective way to cover a liability that exists for a defined period (the shareholder's working life).

Critical Illness Cover (CIC) A partner suffering a career-ending illness can be just as disruptive as their death. Critical Illness Cover is therefore an essential addition for most firms.

  • What it is: A policy that pays out a tax-free lump sum on the diagnosis of a specified serious illness, such as cancer, heart attack, or stroke.
  • How it works: The policy lists the conditions it covers. If the insured is diagnosed with one of these conditions and survives for a short period (typically 10-14 days), the policy pays out.
  • Who it's for: It is vital for any business where a shareholder's continued presence and expertise are critical. A surviving but incapacitated partner creates an even more complex ownership problem than a death. CIC resolves this by providing the funds for a buyout.

The list of conditions covered by CIC policies has expanded significantly. Modern, comprehensive policies from major UK insurers can cover over 50 conditions, including many forms of cancer, neurological diseases, and heart-related conditions.

2. Policy Ownership Structures

How the policies are owned is a critical decision with significant legal and tax implications.

Ownership MethodHow it WorksProsConsBest For
Life of AnotherEach shareholder takes out a policy on every other shareholder. (e.g., A insures B & C; B insures A & C; C insures A & B).Simple concept for 2 shareholders.Becomes exponentially complex and admin-heavy with 3+ shareholders. If a shareholder leaves, policies must be reassigned.Firms with only two shareholders.
Own Life in TrustEach shareholder takes out a policy on their own life and places it into a flexible Business Trust for the benefit of the other shareholders.Highly scalable, simple to manage. If a partner leaves, they can potentially take their policy with them. The trust ensures funds are paid quickly and correctly.Requires correct trust drafting and appointment of trustees.Most firms, especially those with 3 or more shareholders. This is the industry-standard approach.
Company Share PurchaseThe limited company itself owns and pays for a policy on each shareholder.Premiums might be an allowable business expense (subject to strict HMRC rules).Payout is made to the company, increasing its value and potentially creating a tax liability (Corporation Tax). The company then has to perform a share buy-back, which is a complex legal process.Rarely recommended due to tax complexities and administrative burdens.

For the vast majority of UK accounting firms, the 'Own Life in Trust' method is the most efficient, flexible, and tax-sound solution. It simplifies administration and ensures the insurance proceeds are paid directly to the people who need them—the surviving partners—without passing through the company's books or the deceased's estate.

The insurance policy provides the fuel (money), but the legal agreement is the engine that directs it. Without a correctly drafted agreement, the insurance payout could be legally challenged or fail to achieve its purpose.

The Cross-Option Agreement is the preferred legal instrument in the UK.

  • How it works: It's a set of reciprocal 'options' that are triggered by a claim event (death or critical illness).
    • Call Option: The surviving shareholders have the right (but not the obligation) to buy the shares from the deceased/ill shareholder's estate.
    • Put Option: The deceased/ill shareholder's estate has the right (but not the obligation) to sell the shares to the surviving shareholders.
  • Why this structure is clever: Because they are 'options' and not a binding contract to sell from the outset, the shares are still considered part of the deceased's estate at the moment of death. This is crucial for preserving Business Property Relief (BPR), a valuable Inheritance Tax (IHT) relief that can reduce the IHT liability on business assets to zero. A simple 'buy-and-sell' agreement can inadvertently void this relief, creating a significant and unnecessary tax bill.

An expert adviser at WeCovr will always work alongside your solicitor to ensure the insurance and legal agreements are perfectly synchronised.

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Valuation: The Foundation of a Fair and Effective Plan

Accurately valuing the accounting practice is the bedrock of any shareholder protection plan. If the valuation is wrong, the entire plan is compromised.

  • Under-insurance: If the firm is valued at £2m but only insured for £1.5m, the surviving partners will face a £500,000 shortfall when trying to buy out a 50% shareholder.
  • Over-insurance: This is less of a financial problem but means the partners are paying unnecessarily high premiums for cover they don't need.

Valuation Methods for Accounting Firms

Unlike businesses with significant physical assets, the value of an accounting firm lies in its intangible assets: goodwill, client relationships, and recurring revenue streams. Common valuation methods include:

  • A multiple of recurring fees: For example, 1x to 1.5x the value of annual recurring client fees.
  • A multiple of profit: Typically a multiple of Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA). A multiple of 4x to 8x EBITDA is common.
  • A fixed sum: The partners agree on a specific value for the firm.

The chosen method should be written into the shareholder agreement. Most importantly, it must be reviewed regularly. A fast-growing firm can quickly outgrow its initial valuation, rendering its protection plan inadequate. We recommend a formal valuation review at least every two years, or after any significant business event like a merger or acquisition.

Tax Implications of Shareholder Protection

When structured correctly, shareholder protection is one of the most tax-efficient business continuity tools available. Here’s a summary of the UK tax position:

AspectTax TreatmentKey Considerations
Insurance PremiumsPremiums paid by the individual shareholders are not tax-deductible. They are paid from post-tax income.This is the standard for 'own life in trust' and 'life of another' setups. It ensures the payout is tax-free.
Policy PayoutThe lump sum paid out from the life/CIC policy to the business trust is free of Income Tax and Capital Gains Tax.The use of a correctly drafted trust is essential to achieve this.
Inheritance Tax (IHT)A Cross-Option Agreement helps preserve Business Property Relief (BPR) on the shares, potentially making them 100% exempt from IHT. The insurance payout itself, when held in a business trust, falls outside the deceased's estate and is therefore not subject to IHT.This is a major advantage over a simple 'buy-and-sell' agreement, which can nullify BPR.
Share PurchaseThe surviving partners use the tax-free insurance proceeds to buy the shares. This is a capital transaction.The cost of acquiring the shares becomes the 'base cost' for the surviving partners for any future Capital Gains Tax calculations if they later sell the business.

Getting the tax structure right is non-negotiable. It requires professional advice from both an insurance perspective and a legal/accounting perspective to ensure full compliance and maximum efficiency.

Common Mistakes to Avoid with Shareholder Protection

While incredibly effective, shareholder protection plans can fail if not set up and maintained correctly. Here are the most common pitfalls we see:

  1. Forgetting to Review the Plan: This is the single biggest mistake. A plan based on a five-year-old valuation is not fit for purpose. Annual or biennial reviews are essential.
  2. No Legal Agreement: Taking out insurance policies without a corresponding shareholder or cross-option agreement is pointless. The insurance provides the money, but the agreement provides the legal mechanism.
  3. Ignoring Critical Illness Cover: The risk of a partner suffering a serious illness is statistically higher during their working life than the risk of death. A plan that only covers death leaves a significant gap in protection.
  4. Incorrect Trust Work: Using the wrong type of trust or failing to complete the trust deeds correctly can lead to the plan failing or creating an unexpected tax liability. This is why specialist advice is crucial.
  5. Mismatch Between Insurance and Valuation: The sum assured on the policies must exactly match the value stipulated in the legal agreement. Any discrepancy can cause serious problems at the point of claim.
  6. DIY Approach: Trying to arrange shareholder protection online without advice is fraught with risk. The interplay between valuation, insurance, trusts, and legal agreements requires expert, joined-up thinking.

Working with a specialist broker like WeCovr ensures these moving parts are expertly coordinated, giving you a plan that is robust, compliant, and guaranteed to work when you need it most. As part of our service, we provide our clients with access to tools like our CalorieHero app, promoting a proactive approach to health and well-being that underpins all good financial planning.

Frequently Asked Questions (FAQ)

How much does Shareholder Protection insurance cost?

The cost, or premium, depends on several factors for each shareholder: their age, their health and lifestyle (including smoking status), the amount of cover needed (the value of their shares), and whether critical illness cover is included. For example, a healthy 40-year-old non-smoker seeking £500,000 of life insurance might pay £40-£60 per month, whereas adding critical illness cover could increase this to £150-£200 per month. An expert broker can compare the market to find the most competitive terms.

What happens if a shareholder becomes uninsurable?

This is a genuine risk, particularly for older partners or those with pre-existing health conditions. If a shareholder cannot get insurance, alternative arrangements must be made. The shareholder agreement can include a clause for this scenario, such as allowing the uninsurable shareholder's share value to be paid by the surviving partners in instalments over a number of years. It is best to set up protection as early as possible when partners are younger and healthier.

Can we use our existing personal life insurance policies?

Generally, no. Personal life insurance policies are usually intended for family protection (e.g., to pay off a mortgage) and are often written into trust for family members. Co-opting them for business purposes is complex and risky. It is far cleaner and safer to set up dedicated business protection policies under a specific business trust to ensure the proceeds are used for their intended purpose without conflict.

Is this the same as Key Person Insurance?

No, they serve different purposes. Key Person Insurance pays a lump sum to the *business* to compensate for the financial loss (e.g., lost profits or recruitment costs) resulting from the death or illness of a key employee. Shareholder Protection pays a lump sum to the *other shareholders* to enable them to buy the departing shareholder's shares. Many firms need both types of protection.

Secure Your Firm's Future Today

For the partners of an accounting firm, their shareholding represents more than just a financial stake; it represents years of dedication, expertise, and relationship-building. A Shareholder Protection plan is the ultimate act of responsible business planning.

It ensures that if the worst should happen, a lifetime's work is protected. It provides a fair outcome for the departing partner's family, financial stability for the surviving partners, and seamless continuity for the business and its clients.

The process may seem complex, but with expert guidance, it is straightforward. The first step is a simple conversation to understand your firm's unique structure and needs.

Contact WeCovr today for a no-obligation consultation with a business protection specialist. We will help you understand your options, compare quotes from across the entire UK market, and build a robust plan to secure the legacy of your practice.

Sources

  • Financial Conduct Authority (FCA)
  • GOV.UK (HMRC)
  • Association of British Insurers (ABI)
  • Chartered Insurance Institute (CII)
  • Institute of Chartered Accountants in England and Wales (ICAEW)
  • Office for National Statistics (ONS)

Disclaimer: This is general guidance only and does not constitute formal tax or financial advice. Tax treatment depends on individual circumstances, policy terms, and HMRC interpretation, which cannot be guaranteed in advance. Whenever applicable, businesses and individuals should always consult a qualified accountant or tax adviser before arranging such policies.

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WeCovr is an FCA‑regulated insurance broker. We may earn a commission if you purchase a policy via us. This guide is written to be impartial and informational.

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Why life insurance and how does it work?

What is Life Insurance?

Life insurance is an insurance policy that can provide financial support for your loved ones when you or your joint policy holder passes away. It can help clear any outstanding debts, such as a mortgage, and cover your family's living and other expenses such costs of education, so your family can continue to pay bills and living expenses. In addition to life insurance, insurance providers offer related products such as income protection and critical illness, which we will touch upon below.

How does it work?

Life insurance pays out if you die. The payout can be in the form of a lump sum payment or can be paid as a replacement for a regular income. It's your decision how much cover you'd like to take based on your financial resources and how much you'd like to leave to your family to help them deal with any outstanding debts and living expenses. Your premium depends on a number of factors, including your occupation, health and other criteria.

The payout amount can change over time or can be fixed. A level term or whole of life policy offers a fixed payout. A decreasing term policy offers a payout that decreases over the term of the cover.

With critical illness policies, a payout is made if you’re diagnosed with a terminal illness with a remaining life expectancy of less than 12 months. While income protection policies ensure you can continue to meet your financial commitments if you are forced to take an extended break from work. If you can’t work because you’ve had an accident, fallen sick, or lost your job through no fault of your own, income protection insurance pays you an agreed portion of your salary each month.

Income protection is particularly helpful for people in dangerous occupations who want to be sure their mortgage will always be covered. Income protection only covers events beyond your control: you’re much less likely to be covered if you’re fired from your job or if you injure yourself deliberately.

Questions to ask yourself regarding life insurance

Just ask yourself:
👉 Who would pay your mortgage or rent if you were to pass away or fall seriously ill?
👉 Who would pay for your family’s food, clothing, study fees or lifestyle?
👉 Who would provide for the costs of your funeral or clear your debts?
👉 Who would pay for your costs if you're unable to work due to serious illness or disability?

Many families don’t realise that life, income protection and critical illness insurance is one of the most effective ways to protect their finances. A great insurance policy can cover costs, protect a family from inheriting debts and even pay off a mortgage.

Many would think that the costs for all the benefits provided by life insurance, income protection insurance or critical illness insurance are too high, but the great news is in the current market policies are actually very inexpensive.

Benefits offered by income protection, life and critical illness insurance

Life insurance, income protection and critical illness insurance are indispensable for every family because a child loses a parent every 22 minutes in the UK, while every single day tragically 60 people suffer major injuries on the UK roads. Some people become unable to work because of sickness or disability.

Life insurance cover pays out a lump sum to your family, loved ones or whomever you choose to get the money. This can be used to secure the financial future of your loved ones meaning they would not have to struggle financially in the event of your death.

If it's a critical illness cover, the payout happens sooner - upon diagnosis of a serious illness, disability or medical condition, easing the financial hardship such an event inevitably brings.

Income protection insurance can be very important for anyone who relies on a pay check to cover their living costs, but it's especially important if you’re self-employed or own a small business, where your employment and income is a bit less stable. It pays a regular income if you can't work because of sickness or disability and continues until you return to paid work or you retire.

In a world where 1 in 4 of us would struggle financially after just four weeks without work, the stark reality hits hard – a mere 7% of UK adults possess the vital shield of income protection. The urgency of safeguarding our financial well-being has never been more palpable.

Let's face it – relying on savings isn't a solution for everyone. Almost 25% of people have no savings at all, and a whopping 50% have £1,000 or less tucked away. Even more concerning, 51% of Brits – that's a huge 27 million people – wouldn't last more than one month living off their savings. That's a 10% increase from 2022.

And don't even think about state benefits being a safety net. The maximum you can expect from statutory sick pay is a mere £109.40 per week for up to 28 weeks. Not exactly a financial lifeline, right?

Now, let's tackle a common objection: "But I have critical illness insurance. I don't need income protection too." Here's the deal – the two policies apply to very different situations. In a nutshell:

  • Critical illness insurance pays a single lump sum if you're diagnosed with or undergo surgery for a specified potentially life-threatening illness. It's great for handling big one-off expenses or debts.
  • Income protection, on the other hand, pays a percentage of your salary as a regular payment if you can't work due to illness or injury. It's the superhero that tackles those relentless monthly bills.

Types of life insurance policies

Common reasons for getting a life insurance policy are to:
✅ Leave behind an amount of money to keep your family comfortable
✅ Protect the family home and pay off the mortgage in full or in part
✅ Pay for funeral costs

Starting from as little as a couple of pounds per week, you can do all that with a Life Policy.

Level Term Life Insurance
One of the simplest forms of life insurance, level term life insurance works by selecting a length of time for which you would want to be covered and then deciding how much you would like your loved ones to receive should the worst happen. Should your life insurance policy pay out to your family, it would be in a lump sum amount that can be used in whatever way the beneficiary may wish.

Decreasing Term Life Insurance
Decreasing term life insurance works in the same way as level term, except the lump sum payment amount upon death decreases with time. The common use for decreasing term life cover is to protect against mortgage repayment as the lump sum decreases along with the principal of the mortgage itself.

Increasing Term Life Insurance
Increasing term life insurance aims to pay out a cash sum growing each year if the worst happens while covered by the policy. With increasing term life cover amount insured increases annually by a fixed amount for the length of the policy. This can protect your policy's value against inflation, which could be advantageous if you’re looking to maintain your loved ones’ living standards, continue paying off your mortgage in line with its repayment schedule and cover your children’s education fees.

Whole of Life Insurance
Whereas term life insurance policies only pay out if you pass away during their term, whole of life insurance pays out to your beneficiaries whenever this should happen. The most common uses for whole life insurance are to cover the costs of a funeral or as a vehicle for your family's inheritance tax planning.

Family Income Benefit
Family income benefit is a somewhat lesser-known product in the family of life insurance products. Paying out a set amount every month of year to your beneficiaries, it is the most cost-effective way of maintaining your family's living standards to an age where you'd expect them to be able to support themselves financially. The most common use would be for a family with children who are not working yet so are unable to take care of themselves financially.

Relevant Life Insurance
Relevant Life Insurance is a tax-efficient policy for a director or single employee. A simple level term life insurance product, it is placed in a specific trust to ensure its tax efficiency. The premiums are tax deductible and any benefit payable should a claim arise is also paid out tax free, which makes it an attractive product for entrepreneurs and their businesses.

Important Fact!

There is no need to wait until the renewal of your current policy.
We can look at a more suitable option mid-term!

Why is it important to get life insurance early?

👉 Many people are very thankful that they had their life, income protection, and critical illness insurance cover in place before running into some serious issues. Critical illness and income protection insurance is as important as life insurance for protecting your family's finances.

👉 We insure our cars, houses, bicycles and even bags! Yet our life and health are the most precious things we have.

Easily one of the most important insurance purchases an individual or family can make in their lifetime, the decision to buy life, income protection, critical illness and private medical health insurance can be made much simpler with the help of experienced advisers. They are the specialists who do the searching and analysis helping people choose between various types of life insurance policies available in the market, including income protection, critical illness and other types of policies most suitable to the client's individual circumstances.

It certainly won't do any harm if you speak with one of our experienced FCA-authorised insurance partner experts who are passionate about advising people on financial matters related to life insurance and are keen to provide you with a free consultation.

You can discuss with them in detail what affordable life, income protection, critical illness or private medical health insurance plan for the necessary peace of mind they would recommend! WeCovr works with some of the best advisers in the market.

By tapping the button below, you can book a free call with them in less than 30 seconds right now:

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Any questions?

Life, income protection, and/or critical illness insurance are safety nets, very important at a difficult time. If anything happened to you before your cover ends, your life or critical illness insurance would pay a lump sum to your family and/or you (if you took a critical illness or income protection cover) to help cover the losses. Being diagnosed with a critical illness can be devastating, and it won't help matters to be also worrying about how you would cope financially. With a life, income protection, or critical illness policy, you can choose how much cover you need, how you want the policy to pay out, and whether you want cover for both you and your partner. Income protection insurance pays you a regular income if you can't work because of sickness or disability and continues until you return to paid work or you retire. Also known as permanent health insurance, it is quite important for anyone who relies on a paycheck to cover their living costs, but it's particularly important if you're self-employed or own a small business, where your income might be a bit less stable.

Life, income protection, and critical illness insurance pay out millions to families every day. Your expert will explain to you that you need to be honest and open when applying for your insurance.

If you're single with no dependants then it may be that you don't need life assurance. However, if you were to become seriously ill and unable to work, you may benefit from a critical illness or income protection policy. They can help you keep up to date with your rent, bills, food, and other expenses.

It's free to use WeCovr to find life, income protection, and critical illness insurance - we never charge you for quotes. Critical illness, income protection, and life insurance is an investment that pays many times over for you and/or your loved ones.

Life, income protection, and critical illness insurance are important financial products that insurance companies take a lot of care and diligence, so speaking to real human beings ensures that they understand your requirements fully so that you can get the right cover.

All of our partners are carefully vetted and authorised by the FCA, which means they are held to the highest standards that the FCA expects from them and treat all customers fairly!

Our insurance partners give us a few pounds when you take out a policy with one of their experts.

The cost of life insurance depends on several factors, including your age, occupation, health status, and the level of coverage you choose. Your life insurance policy is tailored to your needs, and the cost can vary based on the sum assured, policy term, and other factors.

Some life insurance policies offer an option to add critical illness cover as a rider or as a separate policy. This provides a lump sum payment if you are diagnosed with a critical illness covered by your policy, offering financial support during a difficult time.

Yes, life insurance is available to self-employed individuals to provide financial protection for their loved ones in the event of their death. It ensures that your family can maintain their standard of living and cover expenses such as mortgage payments, bills, and education costs.

If you outlive your life insurance policy and it expires without a claim, you will not receive any payout. Term life insurance policies are designed to provide coverage for a specific period, and once that period ends, the policy terminates without any residual value. However, you can typically renew or purchase a new policy if you still need coverage.

Critical illness insurance provides a lump sum payment if you're diagnosed with a serious illness covered by your policy, offering financial support during a difficult time. It can help cover medical expenses, mortgage payments, and other financial obligations while you focus on recovery.

Critical illness insurance covers a range of serious illnesses and medical conditions specified in your policy, such as cancer, heart attack, stroke, and organ failure. The lump sum payment can be used to cover medical treatment, ongoing care, and living expenses during your recovery.

The cost of critical illness insurance varies depending on factors such as your age, health status, lifestyle, and the level of coverage you choose. Our experts can provide personalised quotes to help you find affordable coverage.

Yes, you can have critical illness insurance alongside your health insurance coverage. Critical illness insurance provides additional financial protection specifically for serious illnesses, complementing your health insurance benefits.

Critical illness insurance policies typically have exclusions for pre-existing conditions and certain medical conditions not covered by the policy. It's essential to review the terms and conditions of your policy to understand what is and isn't covered.

Some critical illness insurance policies may provide coverage for recurring illnesses, while others may not. It's crucial to review the policy terms and understand the specific conditions under which you can make additional claims for recurring illnesses. Your insurer can provide more details on their coverage for recurring critical illnesses.

Yes, you can customise your life insurance policy to suit your individual needs and circumstances. Options may include choosing the sum assured, policy term, premium payment frequency, and additional riders for enhanced coverage.

If you miss a premium payment for your life insurance policy, your coverage may lapse, and your policy could be terminated. However, many insurers offer a grace period during which you can make the payment to keep your policy active. It's essential to contact your insurer to discuss your options if you're unable to make a payment.

Yes, you can typically change the beneficiary of your life insurance policy at any time by completing a beneficiary change form provided by your insurer. It's essential to keep your beneficiary designation up to date to ensure that the proceeds are distributed according to your wishes.

Term life insurance provides cover for a fixed period, such as 10, 20 or 30 years, and pays out a lump sum if you die during that time. It’s often chosen to protect a mortgage or to provide financial support while dependants still rely on your income. Whole-of-life insurance is designed to last for the rest of your life and guarantees a payout whenever you die, as long as premiums are maintained. It’s usually more expensive than term insurance and is sometimes used to help with inheritance tax planning or to leave a guaranteed legacy.

Some term life insurance policies offer the option to convert to a whole life insurance policy without the need for a medical exam or new underwriting. This conversion feature allows you to maintain coverage beyond the term of your policy and provides lifelong protection.

Some life insurance policies offer accelerated death benefits or living benefits that allow you to access a portion of the death benefit if you are diagnosed with a terminal illness. This feature provides financial assistance to help cover medical expenses and other costs during your final months.

While having savings can provide a financial cushion during tough times, income protection insurance offers additional security by replacing a portion of your income if you're unable to work due to illness or disability. It ensures that you can maintain your standard of living and cover essential expenses even if your savings are depleted.

Yes, self-employed individuals can claim income protection insurance if they're unable to work due to illness or disability. Income protection provides a regular income stream to replace lost earnings, helping self-employed individuals cover their living expenses and business costs during periods of incapacity.

The waiting period, also known as the elimination period, is the length of time you must wait after becoming unable to work due to illness or disability before you can start receiving benefits from your income protection insurance policy. Waiting periods typically range from 30 to 90 days, but longer waiting periods may result in lower premiums.

Income protection insurance is designed to provide financial support if you're unable to work due to illness or disability, not for redundancy. However, some policies may offer optional redundancy cover or unemployment cover as an additional benefit, providing a lump sum or monthly payments if you're made redundant.

The tax treatment of income protection insurance benefits depends on whether the premiums were paid with pre-tax or after-tax dollars. Benefits from policies funded with after-tax dollars are typically tax-free, while benefits from policies funded with pre-tax dollars may be subject to income tax. It's essential to consult with a tax advisor to understand the tax implications of your income protection insurance benefits.

Income protection insurance provides a regular income stream if you're unable to work due to illness or disability, while critical illness insurance provides a lump sum payment if you're diagnosed with a covered critical illness, such as cancer, heart attack, or stroke. Critical illness insurance offers financial support to cover medical expenses, living costs, or other obligations during your recovery.

Income protection insurance policies typically have a waiting period (also known as an elimination period) during which you do not receive benefits. If you become unable to work before this waiting period ends, you will not receive any income protection benefits until the waiting period has elapsed. It's important to have sufficient savings or other financial resources to cover your expenses during this initial period.

Many income protection insurance policies allow you to increase your coverage amount if your income rises, without the need for additional underwriting or medical examinations. This feature, sometimes called a 'guaranteed insurability option,' ensures that your coverage keeps pace with your increasing income and financial obligations.

The maximum age to purchase critical illness insurance varies depending on the insurer and the specific policy. While some insurers may offer critical illness insurance up to age 70 or beyond, others may have lower age limits. It's essential to check with insurers to determine their age eligibility criteria for purchasing critical illness insurance.

Whether you can get critical illness insurance if you have pre-existing conditions depends on the insurer's underwriting guidelines and the specific medical conditions. Some insurers may offer coverage with exclusions for pre-existing conditions, while others may decline coverage altogether. It's essential to disclose any pre-existing conditions when applying for critical illness insurance and discuss your options with insurers.

While health insurance provides coverage for medical expenses, critical illness insurance offers financial protection for broader expenses associated with a serious illness, such as lost income, household bills, and lifestyle changes. Critical illness insurance complements health insurance by providing additional financial support during a challenging time, ensuring that you can focus on recovery without worrying about financial burdens.

If you don't make a claim on your critical illness insurance during the policy term, you won't receive a benefit payout. However, having critical illness insurance provides peace of mind knowing that you're financially protected if you're diagnosed with a covered critical illness during the policy term. It's a form of financial preparation for unexpected events and offers valuable protection for you and your family.

If you outlive your critical illness insurance policy and don't make a claim for a covered critical illness during the policy term, the coverage will expire, and you won't receive a benefit payout. Critical illness insurance provides financial protection for a specific period, typically until a specified age or policy term, and offers peace of mind knowing that you're prepared for the unexpected.

Yes, many insurers offer optional riders or add-ons that you can add to your critical illness insurance policy for enhanced coverage. Common riders may include waiver of premium, which waives future premium payments if you become disabled, or return of premium, which refunds a portion of your premiums if you don't make a claim during the policy term. It's essential to review available riders with insurers to customise your coverage to meet your specific needs.

To make a claim on your critical illness insurance policy, you'll need to notify your insurer of your diagnosis and submit a claim form along with any required medical documentation, such as medical reports, test results, and physician statements. Once your claim is reviewed and approved by the insurer, you'll receive the lump sum benefit payment, which you can use to cover medical expenses, living costs, or other financial needs during your recovery.

As we age, the likelihood of encountering health complications increases for us all. In the event that you develop a severe medical condition, critical illness protection can assist with the expenses of crucial bills – enabling you to concentrate on recuperation or adjusting to your new health circumstance.

The typical expense of a Critical Illness protection policy will fluctuate based on aspects such as your age and medical background. As per our investigation, you can secure a policy starting from as low as £8 (for a non-smoking 21-year-old individual).

The most prevalent critical illnesses in the UK are cancer, cardiac arrest, and cerebrovascular accident (stroke).

Cancer is one of the primary causes for critical illness insurance claims in the UK. Cancer constitutes over 80% of critical illness cover claims for females and about 45% of critical illness claims for males.

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