When a key person in a business dies it can have a devastating financial effect. You can help protect your business against the death or critical illness of a key person with key person protection.
- What is Key Person Protection?
Key Person Protection (also known as key man insurance or key person insurance) is a business insuring itself against the financial loss it would suffer if a key person in their business died (or suffered a critical illness if this option is also chosen).
- How does it Work?
Key Person Protection is a life assurance or life and critical illness cover policy taken out to cover the life of a key person in your business. The policy is owned and paid for by the employer, so any pay out is paid to the employer.
Why do I need Key Person Protection?
The loss of a key person in your business could have a severe impact. The business could suffer for example with sales and profits decreasing and increased workloads for the remaining staff.
Key Person Protection pays out a lump sum on the death of the insured key person. It is paid as a lump sum and could significantly help the business to recover during a difficult time. The proceeds could be used to replace lost profit or finding a replacement.