Key Person or Key Man Insurance helps safeguard a business against potential financial loss, caused by a critical illness, terminal illness or from the death of one of the businesses key people.
You can have cover for just death, which comes with a terminal illness at no extra cost or add Business Critical Illness Cover too. (Business Critical Illness is more expensive than Life on its own as you are much more likely to contract a specified critical illness than die in your working life.)
A predetermined lump sum is paid to your business if this happens, (we can help you decide the levels for you and your business needs.) You are usually covered for at least 40 critical illnesses, such as but not only; some forms of cancer, heart attacks, strokes etc. Some insurers are more extensive.
It could be you. A ‘Key Man’ is an employee whose death or continued absence would affect the profits and the running of the business.
The loss of you, an integral employee or other directors may result in reduced sales, a loss of profits/turnover, wasted time, recruitment costs, the disruption of development plans and increased workloads for the remaining staff.
Key Man Insurance is a life insurance policy, which can have Critical Illness added. It is written on the life of a key business employee, but it is owned by the business. If something should happen to that person, the policy is paid out directly to the business. Typically, the lump sum payment is used to either replace the person affected or replace the revenue they would have bought in, but it can be used however you see fit. For this reason, the business pays the premiums and owns the policy.
This is where our advice comes in, but if you think – what would you need if you or another key person was off with a critical illness for a year or more?
This is up to you. Most insurers start at 5 years and go to at least retirement age, 68 in the UK. If it’s for you and you aim to sell up in 10 years, or have a 10-year business loan or business plan then 10 years is sufficient.
Your other key person may have been there for years and probably will never leave. If you take a policy out and the person leaves or you no longer need this cover, you can cancel the policy at any time, without penalty. There is no cash in value either, so it just ends.
Straight away usually!
We may need to check any medical disclosures you have made, by calling the medical underwriters to see if they are likely to increase prices, so we can give you accurate quotes.
This can be done the same day.
There is a specific online medical form for each of the insurers. We would go through the most suitable one, once you are happy with one of the quotes. We do it over the phone and usually, it takes 10 minutes, if you have no major medical issues.
The insurers may need to write to your doctor for information on certain conditions or depending on the level of your cover and your age, you may need a nurse medical – which can be done in 15 minutes, at a time convenient to you, at your home or business address.
On clicking the above links you will leave the regulated site of Heritage Life Limited. Neither Heritage Life Limited, nor Sesame Ltd, is responsible for the accuracy of the information contained within the linked site.
If you would like to know more about our Key Man Insurance services, please get in touch and we’d be happy to discuss how we can help.Contact us