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Keyman Insurance
If a key person dies or is disabled, the business still has to pay its bills.
Cover on the person the business cannot easily replace. The company is usually the owner and the beneficiary. The purpose is continuity of cash, not a personal windfall.
What key person cover is for
Key person, or keyman, insurance is business cover. It is used so that if a revenue-earner, founder, or specialist dies or suffers total and permanent disability, the company receives money to recruit, stabilise clients, and meet obligations.
In a typical arrangement the company owns the policy, pays the premium, and is the beneficiary. The insured person is the key person. Personal family cover is a separate contract with a different owner.
What it is not
It is not automatically tax deductible. Deductibility depends on the facts, the purpose, and the tax rules in force. We do not promise a deduction. It is also not a substitute for a shareholders’ agreement or a buy-sell arrangement, though it is often the funding behind one.
The sum assured should be explainable: profit attributable to that person, cost to replace them, and debts that depend on them. A round number with no story is hard to justify to an insurer and harder to justify later.