Key Man Insurance UK
What is Key Man Insurance?
Key Man Insurance (Key Person Protection Insurance) is a Life Insurance policy taken out by a business on their most important employees or individual directors. By insuring your ‘key’ employees, your business can ensure it will continue to trade in event of their absence due to death, terminal illness or critical illness. The business will receive a lump sum cash payout, which can then be used to help protect the profits, cover any revenue losses, and maintain coverage during this difficult time, all while paying a competitive premium for the policy.
Every business has at least one or two key staff members who are vital to the company’s financial success and who make a major contribution to the success and profits of the business. This could, for example, be a Business Owner, Director, Manager, or another employee with specialist skills who are important to the day to day running of your business.
If that key person were to die or be diagnosed with a critical illness, it is highly likely that your business would be severely affected in a number of ways. Suddenly losing the skills, knowledge, leadership or experience contributed by that person could result in an immediate loss of productivity and profits for the business. In addition, the costs incurred whilst having to recruit and train a replacement could be significant, and the employer may have to spend more money than anticipated to fill the void.
Key Man Insurance protects businesses from the negative effects of losing their greatest asset, which is staff. This could enable a company to continue trading smoothly and effectively in the event of a key person’s death or a critical illness diagnosis. Lump sum payouts can also be used to cover company debt, ensure continuous coverage, and assist in recruiting a replacement employee or director. Furthermore, the payout from the insurance claim can help ease any tax implications that may arise due to the sudden change in the business’s financial situation.
To find out more about Key Man Insurance, the policy benefits, and how Spectrum Financial Advice can help, continue reading and also have a look at our frequently asked questions (FAQs) towards the end of the page. Here, you’ll find content that addresses various aspects of Key Man Insurance that may interest both employers and employees.
Contact us today for a fee-free, no obligation review to find out how easy it could be to protect and secure your business.
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