A partnership built on trust
Mr. Tan and Mr. Lee were more than just business partners; they were friends who had built a manufacturing company from the ground up. Over the years, they had injected nearly RM1 million of their own capital into the business. They were the engine of the company—making decisions, managing clients, and driving growth. The business supported not just their own families, but the families of their 20 employees.
Planning for the business, not expecting the worst
Neither of them expected the business to face a crisis so soon. They had approached TM Legacy Builders initially for financial planning, not thinking about death. Our advisor, however, saw the risk. He asked a difficult question: “If one of you is gone tomorrow, how does the other pay out the deceased partner’s share to his family without bankrupting the company?”
Our advisor recommended Key Person Insurance. The goal was to insure each partner for RM1 million. This money would serve a dual purpose: it would provide fair compensation to the deceased partner’s family for their share of the business, and it would ensure the surviving partner had the cash flow to keep operations running. They agreed, viewing it as a necessary business expense.
What the coverage was designed to do
Key Person Insurance would pay out if a partner:
- Passed away
- Or became permanently disabled and unable to work
The payout ensured the deceased partner’s family was financially supported, while allowing the remaining partners to fairly redistribute or take over the equity. This arrangement helped maintain business continuity and prevented disputes, forced closures, or unnecessary financial strain during an already difficult time.
The diagnosis no one saw coming
Tragedy struck with brutal speed only two months later. Mr. Lee was diagnosed with acute leukemia. The illness was aggressive, and he passed away within weeks. The company was thrown into chaos. Clients were worried, suppliers were nervous, and Mr. Tan was grieving the loss of his friend while trying to keep the ship afloat. To make matters worse, Mr. Lee’s wife was a homemaker with two young children who needed immediate financial support.
The claim process and payout
There was deep anxiety about the insurance claim. Because the policy was only two months old, the partners feared the insurance company would contest it. Our advisor stepped in to manage the investigation. He coordinated the submission of medical reports proving Mr. Lee had no prior knowledge of the illness. The transparency and thoroughness of the application paid off.
After a rigorous seven-month investigation, the full RM1 million sum assured was paid out, along with RM17,000 in accumulated interest. This money was a savior. It allowed Mr. Tan to buy out Mr. Lee’s shares, giving Mr. Lee’s widow the financial security she needed to raise her children without worrying about the business’s daily struggles.
Why Key Person Insurance mattered
Many SMEs in Malaysia fold within a year of a key owner’s death due to cash flow disputes. Thanks to Key Person Insurance, this company survived. TM Legacy Builders helped Mr. Tan honor his partner’s legacy by ensuring the business—and the family left behind—continued to thrive.
Key takeaways for business owners
- Business insurance protects its people, its partnerships, and the families behind the business.
- Losing a partner can break a business if liquidity isn’t available.
- Planning ahead prevents disputes and forced closures.
How TM Legacy Builders supports business owners
We help business owners think beyond daily operations. We provide structured protection that is fair and practical. We focus on guiding our clients through complex claims, especially during emotional periods, so the business can continue even when key people are lost.
