Key Person Insurance
Consider the financial impact if your business lost someone essential. Explore protection around the contribution of a director, owner or important employee.
Opens WhatsApp with IM-Insured on +44 7367 195658. Start a no-obligation conversation about your cover.
What is Key Person Insurance?
Key Person Insurance is designed to protect a business against the financial effects of losing an insured person. Life cover can pay following death; specified critical illness cover may also be available, depending on the policy selected.
Who is it for?
Businesses that depend on an individual’s expertise, revenue generation, relationships or operational role. The right amount of cover should reflect that person’s financial contribution and the cost of disruption.
What happens when one role cannot be replaced quickly?
Key Person cover addresses a financial exposure in the business. It does not replace the individual or remove the need for a continuity plan.
The critical role
Identify the person whose knowledge, relationships or contribution is difficult to replace.
The possible disruption
Estimate lost revenue, recruitment costs and the time needed for the business to recover.
The financial buffer
Business-owned cover may provide funds after a valid claim, according to the policy terms.
The insured amount should be based on a reasoned business exposure, not simply the person’s salary.
What to consider
A valid claim can provide funds to help the business respond to the loss. Key person cover is distinct from life benefits intended for an employee’s family.
Continuity costs
A payout may help with lost income, recruitment, training or other costs associated with replacing the person’s contribution.
Life and illness options
Check the insured events. Life or critical illness cover does not automatically pay whenever someone is unable to work.
Why consider this cover?
The loss of skills and relationships can be harder to replace than a physical asset. Consider how long recovery could take and which costs your business could meet from its own resources.
Before you decide
- Agree a realistic cover amount and review it as the business changes.
- Check the policy owner, beneficiary and insurable-interest requirements.
- Understand illness definitions and any exclusions.
- Ask your accountant about premiums and claim proceeds; tax treatment depends on the circumstances.
How IM-Insured can help
An IM-Insured adviser can discuss the person’s role, your business objectives and the cover available. If your main concern is a loan or ownership succession, discuss those arrangements separately.
Continue on WhatsApp: +44 7367 195658. Your enquiry does not commit you to a policy.
