Shareholder Protection Insurance

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What is Shareholder Protection Insurance?

Shareholder Protection Insurance is a life insurance policy designed to facilitate the buyback of shares from a deceased shareholder.

One of the most damaging events a business can fall victim to is the death of a major shareholder. Should a shareholder or owner die unexpectedly, the event can have a serious impact on the company, not to mention the shareholder’s family. So, along with key man insurance, companies should also look seriously at shareholder protection insurance.

What is the buyback of Shares?

Buying back shares is the procedure of buying the shares back from the deceased’s (or seriously ill) shareholder’s estate. Shareholder Protection Insurance is a life insurance policy designed to facilitate this buyback. In the event of death or critical illness, a sum of money is paid to the remaining shareholders to allow them to buy back shares from the deceased shareholder’s wife or husband. In effect, this allows the remaining shareholders to retain ownership of the company. It also rewards the wife or husband with the monetary value of the shares they have inherited.

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How Does It Work?

How Does It Work

There are three main ways shareholder protection insurance can be taken out:

Most of the time a cross-option agreement will be used alongside the policy. Please check out our blog on cross options agreements.

How Much Cover Do I Need?

This will depend on how much the company shares are worth and what you would be willing to sell them for. Businesses will sometimes need to be valued in order to get an idea of the value of each shareholding.

As a rule of thumb, each person should be covered by the value of their shareholding. Most companies take out a cover for a term of 5 years and, of course, share values can go up and down. In this scenario, we can recommend index linking the cover. This means the sum will go up every year. Or just cover yourselves for more than the current value to try and foresee any increase in value.

It may be worth seeking professional advice on the value of the company before valuing the shares. We also generally advise clients to think about what amount of money they would want their family to receive for the value of their shares. If you were to die or become ill, what would you want to sell your shares for?

How Much Cover

What Is The Cost of Protecting Shareholders?

The cost of shareholder protection insurance will depend on each individual life assured. Quotes will be based on the age, sum assured, smoker status and term of the policy. Actual terms offered will also depend on the health of the individual.


Why not give us a call or fill in the above quote form to get a quote? It takes no more than 5 minutes.

Why Protect Your Shareholders?

It doesn’t matter what type of industry you work in. Losing a shareholder to death or serious illness can be catastrophic. It is therefore critical to ensure that you protect your business and livelihood with shareholder protection.

  • A safe and stable business plan – A shareholder’s death is a surefire way of seriously jeopardising a company’s strength and stability. By taking out shareholder protection insurance, shareholders and investors can enjoy peace of mind. Should a fellow shareholder pass away, surviving shareholders will not have to worry about finding the money to buy back the shares. Instead, they will receive funds that allow them to buy up the deceased’s shares quickly and efficiently.
  • Support for family members – Although shareholders generally have an in-depth understanding of how to run the business, inheriting family members will normally have limited know-how. So, no experience of how to perform the ongoing duties of a shareholder. At the same time, it can be very damaging for a company to have a new member on board who has no idea what they are doing. This is where shareholder protection insurance helps. Most would rather receive a cash value of the shares and move on with their lives. Of course, money can never bring back the loss of a family member, but it will go a long way in helping that family financially.

Find out all about Shareholder Protection Tax Treatment here.

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How it works

Quote and Apply for Shareholder Protection Insurance In 3 Simple Steps



Submit the details of the shareholders who need to be covered.

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Fill out the application and get covered today.

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Meet Our Team

Our dedicated team are here to offer you expert FCA-qualified advice along with 1st class support to make sure the process is fast and simple.

meet our team

Jody Pearmain
Jody Pearmain

Managing Director & Founder (My Key Finance Ltd)

Lori Norton
Lori Norton

Administration Manager at (My Key Finance Ltd)

Tyler Pearmain
Tyler Pearmain

Senior Keyman Insurance Adviser at (My Key Finance Ltd)

Keri Gardiner
Keri Gardiner

Customer Service & Website Admin at (My Key Finance Ltd)

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