A life assurance plan pays out a lump sum if the person who is covered dies, the critical illness plan does the same if they are diagnosed with one of the critical illnesses covered. These will typically include for example cancer, heart attack or a stroke. By taking out these plans to cover all of the partners in your business you will receive a lump sum when you need it.

Has your partnership borrowed money from the bank or from one of your partners? Does it have an overdraft? The death of one of the partners could cause the lender to call in the loan, often very suddenly. Where would the money come from to repay the loan?

By taking out life assurance to cover the amount of the loan you can ensure your partnership has the lump sum available to repay the loan if this happens.