KEY PERSON INCOME PROTECTION
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What Is Key Man Income Protection
Key man income protection insurance, also known as key person income protection is a company owned policy which protects against the financial impact of losing an employee through illness or injury.
Unlike normal key person insurance, it pays out a monthly income to the company to help cover the costs of the key person’s wage and to help meet the cost of a temporary replacement.
How Does Key Person Income Protection Work?
- Maximum Cover – This is normally around £20,000 per month or £250,000 per year for level cover.
- Types of Cover – Level or Increasing to either a set percentage or in line with the retail price index.
- Minimum Term – 5 years
- Maximum Term – 20 years
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.
Why do I need Key Person Income Protection?
Financial Protection: Losing a key employee or owner due to illness, injury, or disability can have a significant financial impact on a business. Keyman income protection insurance provides a financial safety net by helping to pay a monthly income to the company allowing the business to provide a wage to the person who is ill.
Business Continuity: Key individuals often play critical roles in the day-to-day operations, profitability, or success of a business. If a key person becomes unable to work due to a covered event, it can disrupt the business’s operations, relationships, and revenue generation. Key man income protection insurance can help ensure business continuity by providing funds to hire and train a replacement, cover additional expenses, or weather the financial challenges that may arise during the absence of the key person.
Employee Retention and Recruitment: Offering key man income protection insurance as part of an employee benefits package can be attractive to key employees, as it provides them with financial protection in case of illness, injury, or disability. This can help with employee retention and recruitment efforts, as it demonstrates the business’s commitment to protecting key employees and their financial well-being.
Key Person Income Protection FAQ
FAQ useful…
There’s usually great flexibility in terms of how long a Key Person Income Protection policy can cover. Terms typically range between 5 and 20 years.
Cover can start within a range that covers the majority of working ages. The minimum age for cover is 18 while most policies will have a maximum starting age of 59. This will usually cover most key personnel throughout their working lives.
Most cover periods end when the person covered reaches the age of 70.
While all policies vary, typically a provider will refuse to pay out a claim under the following circumstances.
- If incapacity is incurred as the result of intentional self-inflicted injury.
- It’s the result of circumstances not included in the cover summary.
- The person covered doesn’t meet the provider’s definition of incapacitated
- If medical or other evidence is not provided when requested by the provider.
Always read your prospective provider’s terms and conditions before committing to a policy.
It’s always essential to make an informed decision when choosing any form of protection for your business. If you need further advice we’d be delighted to discuss how our Key Person Income Protection can aid your operation and advise on the right cover for you. Call us today on 02071128844
Why Choose Us?
- MyKeyManInsurance.com started in 2008 we are the longest-serving business protection specialist in the UK.
- You deal directly with us we do not pass on your details to any third parties.
- The ONLY Website where you can quote and apply online.
- FCA-authorised advisers with years of experience in business insurance.
- We are a whole market broker able to quote from all the UK providers.
- GUARANTEED Lowest Key Man Income Protection Rates In The UK.
- Free trust set up.
- 5 Star Trust Pilot reviews, our customers love us!
Further Reading
Key Man Insurance UK Taxation Guide (Updated 2023)
Check out our detailed guide on the taxation of key person insurance. We look at how to set up your policy in the most tax efficient way and to make sure your premiums are tax deductable.
Key Man Insurance Guide & Quotes
All you need to know about key man insurance which pays a lump sum in the event of death or critical illness.
Key Person Insurance Calculator
Work out how much money you can save with our key person insurance calculator.
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