Why should we consider Key Person Insurance?
If an essential employee to your business were to suddnenly die or be diagnosed with a critical illness this could result in disruptions and additional costs to the business, such as loss of revenue and recruitment. The lump sum paid from a Key Person Insurance policy can provide immediate financial support help to cover these costs.
While the risk of death is always present, with most ages, the risk of suffering a critical illness is much higher. Therefore, to achieve adequate protection, most companies should consider securing both Key Person Life and Key Person Critical Illness Insurance on their key employees and directors.
Who can a Key Person Insurance cover?
The definition of a key person will be different for each business. Typically it would be the owners, directors, and senior staff who have a major impact on the business both financially and how it operates.
However, anyone can be classed as a key person if it is felt that they have a significant influence on the business. This could include top salespeople and those with a particular skill set and expertise.
What are the benefits of Key Person Insurance?
Continuity – helps to ensure that you can maintain running of the business
Protecting Finances – should the loss of a key person have a negative effect on your profits. You can also cover costs such as staff recruitment and paying of any debts or loan repayments.
Financial Future – uncertainty about the future can affect staff morale and retention. Ensuring that you can continue to operate is essential not only for the success of your business but to give employees the reassurance that their jobs are not at risk.
