What Is Key Man Life Insurance And Its Benefits
January 31, 2008
Every business has got to see the need for life insurance. If you aren’t already using Keyman Life Insurance, it is in your company’s best interests to take the time and read on. It could be time better spent than you think.
Business success can be almost measured by the quality of its staff. Good quality staff or personnel within a business can be its foundation and fundamental to its smooth and effective running. Regardless of what changes effect your business on a day to day basis this fact rarely will.
Small businesses are particularly relevant here. In the UK alone, around 4 million businesses run on 4 people, and over 95% of businesses have less than 10 people working for them. These are the businesses which need to give some time and thought to the purchase of Keyman insurance polices, with especially close attention to Keyman life insurance.
As a business owner you probably already know which people within the business constitute what is know as a key person. These are generally the people within the business that generate the sales or without whom the business just ceases to exist.
It is in protecting these people that Keyman Life Insurance comes into it’s own. Keyman can help protect against the difficulty of losing an employee to prolonged absence or even death of an integral staff member, a factor which can be of crucial importance to the success or failure of your business.
This type of insurance is designed for you to sort out a contingency plan such as recruit a suitable replacement or even train someone up to take on their role and therefore maintain the business and its profits.
Keyman can provide you with much more than just individual employee cover. If a partner or stakeholder dies, you may find yourself faced with the option of either having to buy the remainder of your business from the family members or having to sell the company. Just because the shareholder was committed to the company does not mean that his or her family necessarily feels the same way. Few people would be independently capable of having that sort of capital at their disposal, which is where Keyman can help. We can help provide the capital to keep you in business, regardless of extraneous circumstances. That alone should be enough to alleviate some of the pressure of running your business.
Also the death of a guarantor can be equally drastic. If you find yourself suddenly having to pay of a large business loan when you least expect it, Keyman can provide a policy which will help to rectify an otherwise impossible situation.
As you can see, essentially, Keyman insurance operates in exactly the same manner as a conventional life insurance policy but with the significant difference being that, on the death of the insured, the proceeds of the policy are paid out to the company instead of the deceased’s family. Nowadays, most leading UK insurance companies offer some kind of Keyman insurance within their life and critical illness portfolios. It could even be that you could claim tax relief on premiums paid into this kind of policy.
The basic truth is that no matter what type of business you have, regardless of whether you are a sole trader or a multi-faceted international conglomerate, with Keyman Life Insurance you will be safe in the knowledge that no matter what possibilities lie ahead, you can concentrate on the important things. You, and your valued employees, can continue to be successful and keep your business growing.
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