Click Guardian Tracking Key Man Insurance - UK's Number 1 Specialist - Best Price Guarantee
  • Partnered With
What is Key Man Insurance?

What is Key Man Insurance?

Key Man Insurance is a policy taken out by a business to insure their most valuable employee’s (key people). The policy is designed to protect the company from the financial impacts of losing their key people through death or illness. The business owns the policy and is the beneficiary of any payout.

Policies can be taken out as a life only insurance or with critical illness included. The benefit is a tax-free lump sum which is paid to the company in the event of a claim. The cover is taken out over a term, normally a 5 year or 10 year guaranteed premium depending on how long you think it's needed. All policies through us can be cancelled at any time without penalty or tie ins.

According to statistics, only 28% of UK business’s established in the last two years have any kind of business protection in place. Yet 46% would cease trading immediately if a key person died

Who Are My Key Personnel?

Who Are My Key Personnel?

Your company could have various workers essential to profits. A key person is not always the top sales person or “bread winner”. A key person could be the brains behind the operation. Maybe someone who knows the design mechanics or engineering details of the main product. Maybe the creator of the intellectual property, the invention, discovery or design. Many of the people we insure will be directors and managers. But as far as the underwriter is concerned, as long as there is an insurable interest its reasonable for that person to be considered.

Typical key people will be:

  • The office manager - integral for the day to day running of the business.
  • The web developer - without their know-how the companies main shop window could go down.
  • The Founder - The person who come up with the idea and knows the product inside out.
  • Technical Support Manager - Someone your company relies on to keep the IT side running.
  • The man with the contacts - The person bringing in the majority of sales and profits.
  • Top Sales Person - integral for the day to day running of the business.

Everyone within your company will be linked to profits and as a result be absolutely essential. Companies will always make sure they insure expensive machinery and other company assets. So, therefore, wouldn’t it be wise to insure your most valuable assets, the key people.

How Much Is Keyman Insurance?

How Much Is Keyman Insurance?

The cost of key man insurance is based on each individual life assured. It's calculated much like normal life insurance depending on how old the person is, if they smoke, the amount of cover and the term. All quotes are subject to underwriting which means premiums could go up before terms are issued.

Premiums can increase due to previous medical history but are often increased due to high BMI (Body Mass Index) or high blood pressure. It can also be down to things such as hazardous leisure activity or dangerous duties at work. It's a good idea to tell us any issues up front as there are providers more lenient on certain issues. Free free to use our BMI calculator and see if your premium could be loaded or fill in our form to compare key man insurance quotes.

Calculating Keyman cover

Calculating Keyman cover

The sum assured for a key person is really down to the individual business. What would the financial repercussions be tomorrow if that person was no longer around? Most of the time a business owner will look at the turnover of the company and work out a percentage that the key person brings to the company, then insure for that amount. But it's worth thinking things through a little more. You can use our key person calculator.

 
  • Covering loss of profits
  • Cost of hiring a replacement
  • Keeping all bills and loan repayments covered.
Relevant Life Calculator

Losing a key person can have many detrimental effects to the company which can all contribute to the business’s well being. Contracts still need to be honoured and customer confidence will need to be maintained. Key people often have all the client relationships and the know how of the business. So all things considered a financial injection from a policy pay out will help, but some extra thought and contingency planning can also go a long way.

Tax Treatment

Tax Treatment

The two most common questions we are asked regarding key man insurance tax treatment are:

  1. Can the premiums be off set against corporation tax? - Yes, they can. The company owns the policy and pays for the premiums. These premiums are tax deductible.
  2. Is a lump sum benefit tax-free? - Yes, it is, Its paid tax-free to the company. It's then liable to tax like any other amount of money from a company.

For most people, the above will suffice. If you really want to know more regarding how HMRC treat Keyman insurance then please visit our in depth guide here.

Why Us

Why Us

  • Established in 2008 we are the longest serving business protection specialist in the UK
  • FCA authorised advisers with years of experience in business protection
  • We are a whole of market broker able to compare key man insurance quotes from all the UK providers
  • We GUARANTEE to beat any price.
  • You deal directly with us we do not pass on your details to any third parties.
  • Free trust set up
  • 5 Star Trust Pilot reviews, our customers love us!

Our Customers Love Us!

  • Good for key man insurance

    Great service and easy to understand. Would use again.

    Rating
    Good for key man insurance
  • Excellent service with easy to understand explanations

    Jody Pearmain of Keyman was very helpful in explaining options and I thoroughly recommend his company

    Rating
    Excellent service with easy to understand explanations
  • Recommended!

    A very good service thanks...

    Rating
    Recommended!
  • Great Work!

    Great prices and good advice, what more could you want.

    Rating
    Great Work!
  • Excellent Service

    Everything was made very easy. It was great Jody.

    Rating
    Excellent Service
  • Simple and Low Cost

    Everything was made very easy to understand. The quotes were the cheapest we found too. Very happy!

    Rating
    Simple and Low Cost
  • The services received was great

    The services received was great. Many thanks to these professionals at mymainsurance. I will definitely use them again.

    Rating
    The services received was great
  • We received a wonderful service from…

    We received a wonderful service from mykeyman and will be using them again. The service and product knowledge from team is excellent. Everything was made easy to understand. The price was the best we found too.

    Rating
    We received a wonderful service from…
  • First Class Service

    The standard of service from MyKeyMan was first class. They kept me up to date with progress on my Relevant Life Policy, followed up promptly following delays caused by my medical practice being slow in compiling reports, and responded instantly and clearly to any questions I had.

    Rating
    First Class Service
  • Would recommend!

    Did everything we wanted very well. Decent price and made easy..

    Rating
    Would recommend!
  • Fantastic!

    Over and above what we expected. Thanks!

    Rating
    Fantastic!

meet our team

Our dedicated team are here to offer you expert FCA qualified advice along with 1st class support to make sure the process is fast and simple.

Jody Pearmain
Jody Pearmain

Managing Director & Founder (My Key Finance Ltd)

Lori Norton
Lori Norton

Administration Manager at MyKeyManInsurance.com (My Key Finance Ltd)

Tyler Pearmain
Tyler Pearmain

Senior Keyman Insurance Adviser at MyKeyManInsurance.com (My Key Finance Ltd)

Keri Gardiner
Keri Gardiner

Customer Service & Website Admin at MyKeyManInsurance.com (My Key Finance Ltd)

Key Person FAQ

Can The Owner Of The Policy be Changed?

You can change the owner of the policy through a “deed of ownership”. These are not provided by the providers and would have to be written up through a solicitor. You may need to change the owner of the policy if your company ceases trading or you leave and want to transfer the policy to a personal cover.

How much does Key Man Insurance cost?

The cost is dependant on the life assured age, smoker status amount of cover and term. Once a policy is submitted to the underwriter it can be either accepted on standard rates, loaded, with an exclusion, postponed or declined. So you will not know the exact price of the policy until you have terms issued.

What can the terms be?

When a policy is issued at standard rates and the price remains the same as the quote (subject to when its started). A loaded premium is when the underwriter see’s fit to increase the premium due to possible health issues or something else that has come to light since the original application. An exclusion is normally related to a critical illness exclusion of one or more of the definitions. For example someone may be excluded for cancer if they have previously had cancer. Policies are sometimes postponed if the underwriter wants to wait for further evidence or for cool off periods since a previous health issue. Policies can be declined for a number of reasons but its mainly down to someone being too high of a risk due to bad health.

How long does it take to set up a policy?

Once you have decided to go ahead the next step will be running through an application which entails mainly questions relating to your medical history. This is something we normally carry out over the phone and takes no more than 15 minutes. The application is then submit to online underwriting which will tell us the next step in the process. For someone in good health, below a certain age and below a certain sum assured it can be accepted straight away with terms offered automatically online. If you are happy with the terms, we can start the policy and you can be covered instantly. Unfortunately this is not always the case, and for certain age groups and certain higher sums assured there are automatic requests for further information. This can be in the form of a mini screening or full medical and a GP report request. Medicals can be carried out pretty quick and back to the provider within a week or so depending on your availability. GP reports normally take longer and can take up to 3 months. With high sum assured cases there are often further financial requests which are normally just a few extra questions relating to the last 3 year company profits. There is an option to take out instant cover while underwriting is taking place, but this would need to be requested and is not always available. But even in the worse case scenario we have been known to have policies up and running within a few weeks. A client who is freely available for a medical and willing to help chase a GP for the medical report is always a plus!    

Does it have to be a UK company to take out the cover?

The owner of the policy has to be a UK company although the lives assured do not have to reside in the UK.

Can an LLP take out Key Person Insurance

Yes LLP’s are treated the same as limited companies when it comes to key man insurance.

How Much Should I Insure the person for?

It really depends on the reason for the insurance. If its to cover a loan or investment they you would normally cover them for that amount. If its straight forward key person insurance then you would need to work out how much that person is worth to company. Think about loss of profits, cost of replacement and debts that would need to be covered and contingency to keep the company running without that person. Use our calculator to help work out the cover amount.

Is key man insurance tax deductible?

In most cases yes they are, but it really comes down to what the insurance is being used to cover. For example it may be the case that the premiums are not deductible if the insurance is to cover a business loan. The guidelines on deducting the premiums where originally set our by Sir John Anderson in 1944 who was the then UK chancellor.  As normal with these things its always best to speak to a qualified tax adviser or directly to HMRC as these things can be down to interpretation. However we do go into a lot more detail on one of our blogs here.

How long should we insure our key person for?

Keyman insurance is underwritten very much the same as a normal life insurance product with Guaranteed and Reviewable rates. It really depends on how long you think you will need the policy. If you belive the person you are insuring will be at your company for 10 years then you should take out a 10 year premium guaranteed or reviewable premium. Taking out a shorter premium may mean having to renew it which will normally mean more expense especially if that person has suffered any illnesses. Taking out a longer term premium will guarantee the rates (if you take out guaranteed rates) and means yoo do not have to renew the policy. You can cancel these policies at anytime without penalty so there is no risk of taking of being stuck with a policy if that person leaves the company. Shorter premiums are normally cheaper as the underwriter does not have to calculate the person being that bit older but as mentioned it will be more expensive if you then have to renew the policy.

How much does Key Man Insurance cost?

The cost is dependant on the life assured age, smoker status amount of cover and term. Once a policy is submitted to the underwriter it can be either accepted on standard rates, loaded, with an exclusion, postponed or declined. So you will not know the exact price of the policy until you have terms issued.

What can the terms be?

When a policy is issued at standard rates and the price remains the same as the quote (subject to when its started). A loaded premium is when the underwriter see’s fit to increase the premium due to possible health issues or something else that has come to light since the original application. An exclusion is normally related to a critical illness exclusion of one or more of the definitions. For example someone may be excluded for cancer if they have previously had cancer. Policies are sometimes postponed if the underwriter wants to wait for further evidence or for cool off periods since a previous health issue. Policies can be declined for a number of reasons but its mainly down to someone being too high of a risk due to bad health.

How long does it take to set up a policy?

Once you have decided to go ahead the next step will be running through an application which entails mainly questions relating to your medical history. This is something we normally carry out over the phone and takes no more than 15 minutes. The application is then submit to online underwriting which will tell us the next step in the process. For someone in good health, below a certain age and below a certain sum assured it can be accepted straight away with terms offered automatically online. If you are happy with the terms, we can start the policy and you can be covered instantly. Unfortunately this is not always the case, and for certain age groups and certain higher sums assured there are automatic requests for further information. This can be in the form of a mini screening or full medical and a GP report request. Medicals can be carried out pretty quick and back to the provider within a week or so depending on your availability. GP reports normally take longer and can take up to 3 months. With high sum assured cases there are often further financial requests which are normally just a few extra questions relating to the last 3 year company profits. There is an option to take out instant cover while underwriting is taking place, but this would need to be requested and is not always available. But even in the worse case scenario we have been known to have policies up and running within a few weeks. A client who is freely available for a medical and willing to help chase a GP for the medical report is always a plus!    

Does it have to be a UK company to take out the cover?

The owner of the policy has to be a UK company although the lives assured do not have to reside in the UK.

Can an LLP take out Key Person Insurance

Yes LLP’s are treated the same as limited companies when it comes to key man insurance.

How Much Should I Insure the person for?

It really depends on the reason for the insurance. If its to cover a loan or investment they you would normally cover them for that amount. If its straight forward key person insurance then you would need to work out how much that person is worth to company. Think about loss of profits, cost of replacement and debts that would need to be covered and contingency to keep the company running without that person. Use our calculator to help work out the cover amount.

Is key man insurance tax deductible?

In most cases yes they are, but it really comes down to what the insurance is being used to cover. For example it may be the case that the premiums are not deductible if the insurance is to cover a business loan. The guidelines on deducting the premiums where originally set our by Sir John Anderson in 1944 who was the then UK chancellor.  As normal with these things its always best to speak to a qualified tax adviser or directly to HMRC as these things can be down to interpretation. However we do go into a lot more detail on one of our blogs here.

How long should we insure our key person for?

Keyman insurance is underwritten very much the same as a normal life insurance product with Guaranteed and Reviewable rates. It really depends on how long you think you will need the policy. If you belive the person you are insuring will be at your company for 10 years then you should take out a 10 year premium guaranteed or reviewable premium. Taking out a shorter premium may mean having to renew it which will normally mean more expense especially if that person has suffered any illnesses. Taking out a longer term premium will guarantee the rates (if you take out guaranteed rates) and means yoo do not have to renew the policy. You can cancel these policies at anytime without penalty so there is no risk of taking of being stuck with a policy if that person leaves the company. Shorter premiums are normally cheaper as the underwriter does not have to calculate the person being that bit older but as mentioned it will be more expensive if you then have to renew the policy.

Can we take an income as appose to a lump sum?

Yes we can arrange a policy to pay out monthly amounts. You may even be more suited to a key man income protection policy.

  • Best Price Guarantee
  • Whole of Market Access
  • FCA Authorised Advice


Get a Quote