Key man insurance is a policy companies can take out to cover themselves against the financial losses that can occur when you lose a key person within the company. This can be through death, critical illness or incapacity. Many companies will overlook key man insurance or don’t even know there is such a thing. Obviously insurance is something that all companies have to take out for various equipment and machinery. Companies also normally take out some king of indemnity insurance to cover any mistakes or injuries that can occur within the office. But far too many companies within the UK forget or do not think to take out a key man insurance policy.
So How Do They Work
Key man insurance policies work much like straight forward life insurance and critical illness. The underwriting process on the life assured is the same. To get quotes on key man insurance you will need to give the life assured sex, date of birth and smoker status along with the amount of cover and term. This will then allow the broker to produce quotes. The main difference between a key man insurance policy and a normal term life or critical illness is that the owner of the policy is the limited company. The company pays the premiums and will be the beneficiary in the event that the life assured dies or becomes critically ill. Of course with the critical illness they will need to meet the specified definitions in order for a claim but this is something we will discuss in another blog post. Once a successful claim is made the company will receive the lump sum and can then use this money as is needed.
When getting a quote for key man insurance it’s always a good idea to speak to a specialist whole of market broker. This will ensure that you are speaking to someone who knows how to set up a key man insurance policy correctly but also someone who has access to all the insurance companies who can underwrite a key man policy.
We at mykeymaninsurance.com are whole of market brokers and have 7 years expertise in all business protection type insurance’s. Along with key man cover we also deal in shareholder protection, business loan insurance and relevant life insurance.
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