Almost half (49%) of companies with business protection in place have considered cancelling cover in the past, a survey shows.
VitalityLife, which conducted the poll, said the results suggest cover needs to be regularly reviewed so benefits remain front of mind.
The biggest reason firms had considered cancelling their policy was because of the cost of premiums (13%), followed by businesses trying to save on running costs (9%) and money being tight (9%).
Another 9% cited due to business changes, with 7% saying they believed the cover was no longer needed.
When asked why they had originally taken out business protection, 17% of firms said they had been worried about losing the business, with 14% wanting to ensure the business would continue should anything happen to a key person.
Similarly, 9% wanted to make sure the business would be passed to a specific family member and 8% to the management team. A further 13% had taken out cover after seeing what had happened to an unprotected business.
Peace of mind was highlighted as the main benefit of business protection by 48% of companies, while 32% said it is the protection they feel best protects them for the long term.
A quarter (23%) believe their cover is good value for money, while 20% said business protection insurance doesn’t have high annual payments compared to other business costs.
Many companies put business protection in place after advice from a professional, such as a personal financial adviser (12%) or solicitor (11%), or the business’ financial adviser (11%) or solicitor (11%).
Deepak Jobanputra, managing director at VitalityLife, said business protection plays an essential part in keeping companies afloat if someone key to the business dies or becomes seriously ill.
“This research highlights the importance of supporting advisers in the crucial role of advising on and regularly reviewing business protection, to ensure it remains relevant as needs change. Reminding companies of the significance of the cover they have in place and why they bought it in the first place, can help keep valuable cover in place for the long term,” he added.
Andrew Wilkinson, director at Moneysworth, said the businesses with the keenest interest in taking out protection tend to have a key person in their company who has experienced some level of ill-health.
“These are the clients who are aware of the value of cover and that their policy benefits are protected against future health changes that might occur during the term of the policy. However, over time some businesses can forget the feeling that prompted them to take out cover in the first place, particularly if their circumstances have changed and they’re working hard to keep control of costs,” he warned.