Protect your business against a
critical illness or death of one of
your most integral team members

Key person insurance is a type of insurance policy taken out by businesses that covers individual workers within the company, such as a director or highly talented staff member. It provides cover for the business should the worker become too ill to work or pass away.

Sometimes key person insurance can be known as “key man insurance”. However, this term has become outdated and is slowly phasing out.

Key person insurance covers the employee for the term of the policy. Anyone connected to the business can be considered a key person and can be covered by the policy.

During the policy, all of the premiums are paid by the business. In the event that the employee experiences a critical illness (optional), terminal illness (<12 months) or passes away, the policy will pay out.

The money paid out by the policy can then be used to help cover profit losses that are suffered by the absence of the key worker. It can also be used to cover the costs of hiring a new professional or to train other individuals to be able to replace the key worker.

The overarching benefit of key person insurance is that it provides stability at an uncertain time for the business. It may even prevent the business from having to stop trading. Thus, the importance of taking out a key person insurance policy cannot be understated for many businesses that rely on the skills and expertise of certain individuals within the company.

Some of the things you may need to consider before choosing a policy are:

• Who is most crucial to your business and its stability?
• What would be the cost of replacing those individuals?
• What is the potential income loss if they weren’t around?
• What is the overall cost of the policy and what tax benefits are applicable?

A financial adviser can help your company answer the above questions accurately. With their support, you’ll gain a clear picture of the risks of not taking out key person insurance, which can inform your decision. A financial adviser will also help to search for the most suitable key person insurance and make an application.

Taylor James financial advisers are ready to help your company identify the most suitable policies. Get in touch to discuss your key person insurance options with an expert today.