11 Purdeys Way, Rochford, England, SS4 1ND
11 Purdeys Way, Rochford, England, SS4 1ND
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Key person income protection is a business protection policy that insures your company against the financial loss caused by a key employee, whether that’s a company director, a founder, a senior salesperson or a technical specialist, being unable to work due to illness or injury. The policy doesn’t replace that person’s own salary; instead, it pays a benefit to your business to help cover the shortfall their absence creates, such as lost revenue or the cost of bringing in temporary cover. That distinction matters, because cover designed to continue an individual’s personal income while they’re off work is usually structured as executive income protection instead.
This key person income protection cover typically works along these lines:
If the person you’re protecting is also a shareholding director, it’s worth reading about director life insurance alongside this cover, since the two often work together.
Key person income protection pays a monthly benefit to your business at the end of the deferred period, for as long as the key person remains unable to work, up to the policy’s maximum benefit term.
Premiums can be paid on a monthly or annual basis. The premiums are normally tax deductible but may be counted as a benefit in kind. Read more about the taxation of key man insurance here.
Financial Protection: losing a key employee to illness, injury or disability can put real strain on a business’s finances. Key person income protection insurance helps by providing a monthly benefit to the company, so it has funds available to cope with the shortfall while it adjusts to the person’s absence.
Business Continuity: key individuals are often central to day-to-day operations, client relationships or revenue generation. If one of them is unable to work, cover can help fund business overhead costs such as temporary staff, recruitment or training a replacement, so the business can keep trading while it adjusts.
Businesses that also carry commercial borrowing may want to consider business loan protection alongside this cover, so a loan doesn’t become an additional burden during the same period.
Employee Retention and Recruitment: offering this type of cover as part of a benefits package can help attract and keep the people your business depends on most. It signals that the business plans seriously for the risk of losing a key person’s contribution, which is worth bearing in mind even though the cover itself protects the business rather than the individual’s own finances.
There isn’t a single best key person income protection insurance policy for every business; the right choice depends on how the cover needs to work for you. A few things worth comparing before you commit:
Because the right balance depends on your business, we compare quotes across the market as a whole-of-market, FCA-regulated broker, rather than tying you to a single insurer. Use our key man insurance calculator to get a starting figure for how much cover your business might need.
3 Simple Steps.
Submit the details of the key member of staff
We compare the quotes
and submit application to underwriting.
Legal & General is one of the established UK insurers offering legal and general key person income protection, alongside other providers such as Aviva and Zurich. Like other insurers in this market, their policies generally follow the same basic structure, a choice between level and increasing cover, a deferred period and a set benefit term, though the specific terms, underwriting approach and claims-handling process vary by provider and are worth comparing rather than assuming. Rather than approaching Legal & General directly, we compare their cover alongside the rest of the market, so you can see how their terms and pricing stack up before choosing a policy.
If you’re looking for cover that supports staff more broadly rather than a single key person, our sick pay insurance page covers a related option worth comparing.
What people are saying about us.
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 most suitable we found too.
I had a great time working with My Key Man Insurance when I applied for the different insurances they offer. They were able to answer all of my questions quickly and effectively. I will recommend them to my friends and family.
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 most suitable we found too.
Jody was very helpful in explaining the options and I thoroughly recommend his company
Key man insurance taxation rules have changed in 2024, affecting how businesses manage this important coverage. Here’s what you need to know about the latest updates.
Key man insurance is crucial for protecting your business from the unexpected loss of key personnel. Here are 5 reasons why every company should consider this essential cover.
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Aviva Relevant Life Insurance Review Request A Quote Today speak to one of our advisors or fill in our form to When it comes to Relevant Life Insurance…
Cover terms vary between insurers, but there’s usually plenty of flexibility in how long a key person income protection policy runs, so you can match the term to how long you expect the key person to remain critical to the business. We’ll help you find a term that fits your business rather than assume a fixed range applies.
Most insurers set both a minimum and a maximum age at which cover can begin, though the exact limits vary by provider. As a whole-of-market broker, we compare across insurers to find one whose age criteria suit the person you’re protecting.
Yes, most policies stop covering the insured person once they reach a set age, though this varies by provider. We can confirm the exact age limits that apply once we know which policy best suits your business.
Policies vary, but a provider will typically decline a claim if the incapacity results from an intentional self-inflicted injury, falls outside the circumstances set out in the policy summary, doesn’t meet the provider’s definition of incapacity, or if requested medical evidence isn’t provided. Always read the terms and conditions before committing to a policy.
UK key person income protection policies tend to have a limited benefit term rather than paying out indefinitely, for several reasons: it encourages the business to recruit a replacement, it caps the insurer’s exposure and helps keep premiums lower, it matches the temporary nature of the need, and it avoids overlapping with any personal income protection the employee holds separately. Terms can usually be adjusted if your business circumstances change.
For a small business, the best key person income protection insurance is usually the policy that matches your budget and the specific role you’re protecting, rather than the cheapest or best-known name. A shorter deferred period can help control costs, though it’s worth weighing that against how quickly your business would need funds if a key person were off work.
Yes, Legal & General is one of several UK insurers offering legal and general key person income protection, alongside providers such as Aviva and Zurich. We compare their policy terms and pricing against the rest of the market as part of our quote comparison service, so you don’t need to approach them separately.
