Swiss Life is introducing a trust which will allow partnerships to get the
benefits of keyperson insurance for the first time.
The trust overcomes the problems of English law, which states that a
limited company is legally separate from its shareholders or staff but a
partnership has no legal existence separate from the partners of the firm.
Traditionally, this has meant that each partner has had to arrange an
individual keyperson policy, as policies cannot be set up in the name of
The legal status of partnerships makes policies difficult to administer
because any change of partner would require a complete reorganisation of
Swiss Life requires the policy to be effected by one partner and written
The trust is available with Swiss Life's range of business protection
products. It can be applied to benefits payable under life, income
protection and critical illness plans. Any claims are payable to the
trustees for the benefit of all the partners.
The trustees can be the partners or independent trustees.
Personal finance research and planning manager Rosalind Pearson says: “The
new trust will allow partnerships to protect themselves against any
financial loss due to the death or sickness of key employees.”