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11 Purdeys Way, Rochford, England, SS4 1ND
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Key person insurance offers financial protection if a business loses an important employee. While the purchasing company initially owns these policies and receives payouts, situations arise where assigning ownership to another entity makes strategic sense.
This article explains what assignment involves, the documentation required, and key reasons UK companies may transfer their key person cover to other organisations.
You can find deed of assignment templates here which as OK to use. We can also provide them on request.
Key Person Insurance is a vital form of business protection. It ensures your company remains financially secure if a team member unexpectedly dies or becomes critically ill. Your company can safeguard against the sudden loss of a key contributor, navigate challenging transitions smoothly and protect future growth with the help of Key Person Insurance.
You may also wish to take out relevant life Insurance for your employees. If an employee or director dies or develops a terminal illness, the insurance will pay out a lump sum to their beneficiary.
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Assigning a key person policy means legally transferring all ownership rights and beneficiary status from the original policyholder to a new entity. The assignee receives all future policy rights.
To execute an assignment, the policy owner works with the insurer to complete the required paperwork such as a deed of assignment. This formally shifts control to the assignee entity, directing any potential payouts to them rather than the original owner.
Consent is also needed from executives who are insured life under the policy before initiating assignment proceedings. All parties must agree on the change in arrangement.
There are a few strategic reasons a UK company may opt to assign their key person cover rather than retaining ownership:
Essentially, assigning key person insurance manifests preparedness for unexpected transitions that may significantly impact investors, partners or buyers.
A deed of assignment legally documents the policy transfer. It captures details on all involved parties, the policy itself, compensation, terms, and final beneficiary designation.
Proper deeds signed by the assignor and assignee protect both interests. The documentation can also demonstrate the validity of assignments to external stakeholders like lenders.
Ensuring a legally coherent deed of assignment is vital to guarantee the policy’s assigned ownership cannot be contested.
In summary, businesses assign key person policies to provide assurance to partners, investors and buyers involved in transactions. Seeking legal guidance ensures assignments are properly structured and documented.
Read here for further information on key person insurance.
Jody was very helpful in explaining the options and I thoroughly recommend his company
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.
The standard of service 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.
Jody was very helpful in explaining the options and I thoroughly recommend his company
The standard of service 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.
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.
Jody was very helpful in explaining the options and I thoroughly recommend his company
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