Answer the below questions.
- Is your company successful?
- Does your company rely on certain people to run it?
- Would your company struggle to make profits if it lost one or two certain people?
If you answered yes to the above questions then you really need to be looking at taking out key man insurance. You would also be correct in your assumption that most directors and business owners would also answer yes to most of the above. That’s because most companies should have the cover. Many UK companies and directors only think about key person insurance once they have lost someone. People tell them you should have taken out key man insurance. By this time obviously it’s often too late.
It’s quite easy to work out who in the company is key. Think about how your company works. Do you rely heavily on a website? Is your web developer therefor your key person? Do you sell things? Is your key person a sales man or woman? It could even be your PA or shop manager. Someone who knows the business inside out. What would you do if they die tomorrow? Would your company lose money? Would you be able to replace that person easily?
We have spoken to numerous companies who have called us after losing a key person. They realised the struggles they went through and now need to make sure everyone is covered. There are obviously costs for key man insurance and you can get a quote from our site. It’s not always cheap either. Depending on the life assured it can be quite expensive. So it really depends on how much that person is worth to your company. If that person brings in 90% of your profits then it’s probably worth paying. When doing the calculations its quite easy to see that its probably worth it. Remember you are probably paying out for numerous other insurances that are not important for the success of your company.
Of course a key man insurance policy will cover the life assured if they were to die but there are other types of cover that you can add to the policy. We will be talking about the variations in our next post.
We use a range of insurance providers and their products could be more suitable for your company. These articles are for information only and does not constitute as financial advice in any way