What is Key Man Insurance?
Key Man Insurance helps safeguard a business against the financial effects of a critical illness, a terminal illness or from the death of one of the businesses key people. A ‘Key Man’ is an employee whose death or continued absence would affect the profits and the running of the business.
The loss of an integral employee or director may result in: reduced sales, a loss of profits/turnover, wasted time, recruitment costs, the disruption of development plans and increased workloads for the remaining staff. Keyman Insurance is a life insurance policy, which can have critical illness added. It is written on the life of a key business employee, but it is owned by the business. If something should happen to that person, the policy is paid out directly to the business, for this reason the business pays the premiums.
Find out more about how Key Man Insurance is treated as a tax deductible business expense.
Who is a Key Man?
Key people are individuals whose skills, knowledge, experience or leadership are important to a business’ continued financial success. Examples of a key individual include, but are not limited to: sales directors, IT specialist, managing directors and heads of product development.