What is keyman insurance ?
When you’re just starting out, you’ve got a lot on your plate, and it seems like you spend all your time working on the urgent stuff-trying to get your product or service ready, hiring people, figuring out how to increase sales, paying the bills and so on.
It’s hard to find the time to consider something that isn’t really urgent but that can be incredibly important, such as insurance-specifically, “key man” insurance.
Keyman insurance is simply life insurance on the key person in a business.
In a small business, this is usually the owner, the founders or perhaps a key employee or two. These are the people who are crucial to a business the ones whose absence would sink the company. You need key man insurance on those people!
Here’s how keyman insurance works:
A company purchases a life insurance policy on the key employee, pays the premiums and is the beneficiary of the policy. If that person unexpectedly dies, the company receives the insurance payoff. The reason this coverage is important is because the death of a key person in a small company may cause the immediate death of that company. The purpose of key man insurance is to help the company survive the blow of losing the person who makes the business work. The company can use the insurance proceeds for expenses until it can find a replacement person, or, if necessary, pay off debts, distribute money to investors, pay severance to employees and close the business down in an orderly manner.
In a tragic situation, keyman insurance gives the company some options other than immediate bankruptcy.
If the company is just you and doesn’t have any employees or other people who depend on it, then key man insurance isn’t as necessary. You’ll notice that I didn’t mention your family-don’t confuse keyman insurance with personal life insurance. If you have a spouse and/or children who depend on your income, then you should have personal life insurance for that purpose.
Do you know how your business would cope if it lost a Key Person?
- 1 in 10 owners expect to stop trading straight away, on the death of a key person.
- 61% of business owners say losing a key person would have a major impact on business.
- 85% of the business surveyed have 3 owners or less.
The Plan will have no cash in value at any time, and will cease at the end of the term. If premiums are not maintained, then the cover will lapse.
Send Us an Enquiry
These are external links to our social media accounts , by clicking on any link you will be taken away from the regulated website
Health Insurance is designed to cover the cost of private medical treatment for medical conditions you may suffer in the future – this can be something simple like breaking a bone or more serious like a heart attack
Shareholder protection insurance also helps other shareholders settle any future problems say for instance the death of one of the shareholders or when a holder gets a serious illness..
This website is only directed at persons within the UK.
Anthony Marshall trading As Marshall Financial Solutions is an appointed representative of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority
Copyright © Marshall Financial Solutions 2020. All right reserved. | E-Mail: Info@marshallfinancialsolutions.co.uk