Who Needs Keyman/Keyperson Insurance?
Every company has invaluable employees they’d like to keep forever. Unfortunately, sometimes life circumstances such as injury or illness takes them away earlier than expected. Keyman – or keyperson – insurance protects your company or business partner by not leaving it financially vulnerable if key employees were to be lost.
What Does Keyman Insurance Do?
A keyman insurance policy is owned by an organisation to insure a key member of their business or company. If your insured employee or business partner suffers a critical illness, is permanently disabled, or dies, the policy will provide you with a lump sum benefit, often tax free.
The difference between keyman insurance and normal life insurance is simply the ownership structure of the policy. The basic definitions and benefits provided are the same as policies owned by the individual, with the key difference being the ownership structure and the purpose of the insurance.
What Kind of Companies Need It?
Whether your company is brand new, international, or in between, there is a keyman policy that is essential for your business.
For large organisations it is designed to ease the financial loss of a key employee. It is common for larger companies to identify several people in different roles and with varying ownership capacities, to insure several different key members within their organisation. When a company loses a key member of staff, often productivity and profitability can be affected. Insurance can minimise the impact of this loss.
For smaller companies with partners, it is designed to protect each partner. Correct buy-sell agreements make it easy for small business partners to be confident they can survive as a company if anything were to happen to their partner.
The following pages will help you better understand how keyman insurance can fit your needs: