Life Underwriting

Alexander Beard have proven expertise in large case/impaired life underwriting

Here are just 3 examples of cases we have successfully worked on in recent times, all overseen by one of our experienced partners:

Protection of business assets is quite often overlooked by many directors in business.

When a shareholding director dies their shares will probably pass to their next of kin if no other agreements exist. In this several issues may emerge.  It is possible that the other shareholders do not wish to be in business with the beneficiary as they may offer little in terms of knowledge or expertise in the required areas.  It may also be that the beneficiary does not wish to be involved for the same reason but the other directors are in no position to purchase the shares.

We have given advice where we have not only ensured that the directors can afford to purchase the shares but so as agreed in advance they can insist the beneficiaries sell to ensure the continuity of the company.

Case History 1:

John Croasdale, senior partner based at our Chester branch was approached to provide a market competitive quote for the Managing Director of a group of Residential Nursing homes.

The cover required was for £1.2 million over a 15 year term to underpin new funding agreed with the group’s bankers who made the loan subject to satisfactory cover being in place.

John’s long expertise allowed him to quickly identify the 2 most competitive life companies who agreed to share medical underwriting and John then discussed the case in detail with each underwriting team to ascertain their full requirements.  Obtaining agreement to share medical information avoided the client having to attend two medical examinations but retained the competition between the two companies both of whom were keen to win the business.

John then examined the conditions on both plans and was able to persuade the more expensive company (who’s terms he preferred) to price match the less expensive quote.

Cover on standard terms was obtained within 4 weeks allowing for the funding to be released without delay with the policy being assigned to the bank in question.

Both the client and the bank were delighted with the outcome with minimum of delay, allowing the client to continue with the growth of their business.

Case History 2:

Resulting from the acquisition by an Indian conglomerate of a business owned by an entrepreneur with a significant reputation in his particular industry, the new owners approached our London branch to arrange a £3.4 million sum assured ‘key-man’ life cover for the 4 years of the earn out period.

The entrepreneur in question unfortunately suffered from both Parkinson’s and Diabetes.  As this was an extremely difficult case to underwrite it was handled personally by the managing partner of our central London branch - Andrew Moore.

All main-stream life insurers rejected the proposal but again, using his long standing experience in the market place Andrew was eventually able to arrange cover underwritten directly through a Lloyds of London agency allowing the acquisition to complete.

Case History 3:

Mike Shakespeare, a partner in our Chester branch was consulted instructed by a London based accountancy and management consultancy firm last year to provide co-Director /shareholder protection in a situation where one of the Directors had a pre-existing medical condition, whereby they were declined Critical Illness cover.

Mike worked with the client’s G.P. to obtain in depth explanations of the impact of the client’s condition which together with additional evidence from the client allowed Mike to use his knowledge of the marketplace to approach the underwriters at one of the UK’s largest insurers; a life company he knew to be more sympathetic to the condition in question and successfully negotiate with the company’s underwriter to agree cover without exclusions to the contract at a rated premium affordable to the client resulting in each Director being placed on cover for £1,000,000.

We then liaised with the Directors legal advisers who drafted an agreement referencing the policies in force, that ensured the should the Directors suffer a critical illness they would have the option to utilise the policy to give each of them the option to buy the other Director’s shares allowing the departing Director to leave with a large capital sum without diminishing the capital reserves of the firm.  They could even leave this money within the company to defer this decision or just buy a proportion of the shares to enable the director to work part time.  

This advice will ensure the security of the company, its directors and their families into the future.