Partnership Protection

Partnership protection guards your clients against losing control of their business in the event of a partner being diagnosed with a critical illness, terminal illness or if they die. A life or critical illness policy will provide funds to buy the interest in the partnership from the affected partner or their estate.

Partnerships and limited liability partnerships 

There are two types - traditional partnerships and limited liability partnerships (LLP). A LLP will continue following the death of a member but profits will be paid to the deceased’s estate. If there is no Partnership Agreement for a traditional partnership, it will dissolve on death and the deceased partner’s estate and beneficiaries will be entitled to their share of the business.

Why it's needed

If a business partner dies or wants to leave when they are diagnosed with a critical or terminal illness, the remaining partners may want to buy their interest in the business and keep control. But only a few will have the financial resources to do so.

Taking out partnership protection insurance gives remaining partners the financial support they need, helping them keep the business running and to retain control in difficult times.

Setting up Partnership Protection Insurance

In a traditional partnership, each partner takes out a life or life and critical illness policy and writes it into trust for the benefit of the other partner(s). We have a specimen trust document – please check with your client’s legal advisers on the suitability of this document for their circumstances.

If there are just two partners, they can each set up a personal life of another policy.

The individual partners pay the premiums - you can adjust these to reflect each partner’s share in the business.

Although the partnership may have a name and a bank account, the business cannot own property or insurance policies in its own name. In the case of a LLP, which is recognised as a legal entity, the business (rather than individual partners) can own the policy. See our Business Protection Adviser guide for more information.

If you think partnership protection could be the right cover for a client, you can find out more information in our straightforward guide and supporting literature.

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Smart Health

From on-demand consultations with UK based GPs to second medical, our Smart Health service is a convenient way to connect your clients to tools that help them manage their health and wellbeing. It’s available 24/7, 365 days a year, anywhere in the world and can also be used by their partners and children up to age 21, all at no additional cost.

Smart Health is a non-contractual benefit that could be changed or withdrawn in the future.


Literature and support materials

Business Protection Adviser Guide

This Business Protection guide helps to support and streamline your advice process.

Download Updated 09 Dec 21
Reasons why - Business Protection

A handy guide to provide an example of what a ‘reasons why’ letter could look like.

Download Updated 16 Nov 23
Term Assurance for Business - Cover Details

Read our Cover Details for an explanation of how AIG's Business Protection cover with Term Assurance works.

Download Updated 13 Dec 20
Critical Illness for Business - Key Facts

For more information on AIG's Business Protection - Critical Illness with Term Assurance cover, visit our Key Facts.

Download Updated 29 Jan 24
Critical Illness for Business - Cover Details

Read our Cover Details for an explanation of how AIG's Business Protection - Critical Illness with Term Assurance product, works.

Download Updated 29 Jan 24
Term Assurance for Business - Key Facts

Get into the detail on AIG’s Business Protection with Term assurance cover with our Key Facts document.

Download Updated 13 Dec 20
Business Protection - Quick reference guide

This document is a snapshot of our Business Protection offering. Get an overview of the types of cover on offer, how to determine a cover amount, features and benefits and those all-important tax considerations.

DOWNLOAD Updated 01 Mar 24