KeyMan Insurance
Article
Keyman life Insurance cover is a policy taken out to protect
your business against the financial loss of a key
worker or against the financial repercussions of
loosing a key employee. Many large business's
will already have these policies in place but small to medium
size companies tend to overlook this Insurance or do not even
know it exists. Business’s don’t think twice to
insure their important equipment, or their company cars, but
for some reason do not think to insure the most important
part of their company, “the key people” Until
of course they loose a key worker through a critical illness
or death at which time it is too late. Please see this case
study for an example.
Over 90% of UK companies employ less than 10 people and these
are exactly the companies that are most at risk by the loss
of a key person due to long term illness or death. Prolonged
illness or death could spell the end for some of these businesses’s
weather a limited company, a partnership or a sole trader.
1 in 3 people will contract some type of cancer before retirement
age. Does this ring any alarm bells?...
Types Of KeyMan Insurance you may need to
think about.
1. Provide an income to the company whilst the key person
is away from work or to train or recruit a replacement.
2. Insurance to protect profits that may
see a serious fall without that person.
3. To provide monies to the remaining directors, shareholders
or partners in order for them to buy out the share’s
from the original owner. (Shares could otherwise fall
into the wrong hands such a wife or husband who knows nothing
about your business)
4. Insurance for anyone involved in guaranteeing business
loans or other banking facilities.
Who Are The Key People?
- The people who drive the business, create
and steer it in the right direction
- The people without whom your business would loose sales
and profits.
- Directors, Partners, Shareholders
- Integral managers, or Key IT development specialists or
development operators.
I'm sure you may well have others in mind, is it yourself?
Insurance to Protect Your
Profits
The damaging effect of loosing your key person could go
well beyond just the cost of a replacement. They could be
the sole reason your company is doing so well. So insurance
to cover loss of profits is an important
consideration.
Protect Shareholders Or Partners
Families of the deceased or long term ill may want to sell
their stake in the business to someone unfit to hold such
a high position within the company. Or a member of the family
may want to take up a place on the board and make decisions
within your company. Insurance policies can be set up to provide
the necessary finance to buy the shares from the original
shareholder or their family.
Protect against those
who maybe liable for Personal Guarantees
Business’s will often have loans or will have raised
finance, which will often require a guarantee or charge on
their personal property. Lenders may well and often do call
in the loan at this time. An insurance product can be structured
to pay off this loan and free the business and possibly the
family from this financial burden.
Can Your company afford to take these risks and ignore Key
man Insurance?
Most UK leading insurance companies will be able
to advise you of how best to arrange your cover and tailored
it to your business.
MYKEYMANINSURANCE.CO.UK IS NOT OFFERING FINANCIAL
ADVICE PLEASE SEE A QUILIFIED IFA FOR KEYMAN QUOTES AND ADVICE.
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