Protect your business from the loss of an employee who is essential to your company’s ability to operate or generate revenue.
Our advisors are on hand to answer any of your questions and help you find a key person policy. We’ll aim to find you the most suitable and competitively priced policy for you that offers the coverage you need. Fill in some contact information, and a member of our team will be in touch to help you.
Key person insurance is a type of life insurance policy designed specifically for businesses. The policy covers an individual that’s ‘key’ to a company, so that if they pass away or are diagnosed with a critical or terminal illness, the business will receive a cash sum payout. Key person insurance aims to provide protection to companies by reducing the risks associated with losing employees that are essential to its operations or revenue generating activities.
Both key person and key man insurance mean the same thing, and you’ll often see the terms used interchangeably. In our opinion, key man insurance is outdated terminology, so we opt to use key person throughout all of our communications.
A key person may be anyone in a business which is essential for the company’s operations or revenue generation. For someone to be considered a key person, their loss must have a negative impact on the business, either through revenue loss or an inability to continue operating. It’s important to understand that being a key person isn’t based on job title, but on their role within a business. Here are some examples of common key persons that may be insurable under this policy type.
Provide protection to your business in the event that one of your employees is unable to work.
Demonstrate to investors, shareholders or other stakeholders that your company has planned for risks relating to employees.
The financial payout may help to make arrangements that allow you to continue operating sooner.
It may provide you with peace of mind knowing that the financial payout may be a lifeline for your company in the event of the worst happening.
If you’re a small to medium-sized business, you may have more reliance on specific employees and find it difficult to replace them, increasing the need for cover.
The cost of key person insurance varies per business, depending on factors unique to your policy and the employees you’re covering. Here are some factors that impact the cost of key person insurance:
Choosing a suitable level of cover is an important consideration, as any payout you receive should be based on the loss you expect to receive in the event of their serious illness or death. This may be lost revenue, the cost to replace them, or a combination of both. Our advisors can help you calculate the level of cover that may be most suitable to your business and the person you’re insuring.Get a quote
Your key person policy will outline what validates a claim, and any exclusions that may be in place, such as specific causes of death that aren’t covered. You may make a claim in the following circumstances when an employee:
Is diagnosed with a terminal illness.
Is diagnosed with a critical illness (if included within your policy).
Is injured and incurs a disability that prevents them from working.
Dies while employed and the policy is active.
The payout can then be used however the business wishes. Whether this is to help directly support hiring a new employee or to pay off business debts, such as loans, which may now pose a higher risk due to the loss of the team member. Ultimately, the option on how the money is best spent is up to the company themselves. The amount you receive depends on how much cover you opted for before purchasing the policy.
Our advisors can help compare the available policies on the UK market. By comparing your options, we aim to find you the most appropriate policy at at a competitive premium for you. Provide some information about your company, and we’ll be in touch. This is a free service with no obligation to purchase.
“I’ve seen key person provide a lifeline for companies that rely on their employees to operate. The financial payout gives them more options to adapt and overcome”
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