Key Person Insurance UK

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.

What is ‘key man insurance’?

This type of insurance provides a financial cushion to cover potential losses in revenue, recruitment costs, or other expenses due to the loss of a key person. Key Person Insurance focuses on the critical people whose absence would significantly impact the business’s success.

They may have been a ‘key person’ because your company relied on their specialist skills and knowledge. This typically includes people in the following positions:

The Office Manager – integral for the day-to-day running of the business
The Web Developer – without their skill set the company’s main shop window could go down
The Founder or Business Owner – The person who came up with the concept and is an expert in the product
Technical Support Manager – Someone your company relies on to keep the IT side running
The Person with the Contacts – The person bringing in the majority of sales and business profits
Top Sales Person – Your most talented sales generator
The CEO or Chief Technical Officer – The key people at the top of the business

Who is a key person?

A key person in your business is anyone who’s long-term absence or death could cause financial loss for the company. This could be in the form of profit loss as you lose their important skills and knowledge that the company had relied on to make sales. Your customers or contacts may lose confidence in the business directly due to the loss of the key person, which could affect your revenue. The company may also face significant recruitment costs to replace the person.

When should you consider keyman insurance?

Key Person Insurance in the UK is an important policy if your company relies on specific individuals whose expertise, leadership, or client relationships are essential for the success of the business. For example, if losing a founder, top salesperson or executive would significantly disrupt the company’s operations or revenue, Key Person Insurance is worth considering.

You should consider Key Man Insurance in the UK if you can’t easily replace an individual because they have a unique skill set or experience. Not only does it help ease the transition period, but it also acts as a safety net to help your company overcome challenging times and reassure employees, stakeholders, and clients alike.

It’s a good idea to consider Shareholder Protection Insurance too, as this allows you to buy back shares should a major shareholder become terminally ill or die.

Why Choose My Key Man Insurance

Founded in 2008, we are the UK’s 1st key man insurance specialists. Our objective is to offer clients the best protection at the lowest price in an easy-to-understand manner. As brokers, we provide a range of solutions that allow our clients to compare quotes from a whole market offering the best deal every time!

Use our online form to compare quotes and start protecting your company today.

Feel free to call and speak to one of our qualified advisors and we can guide you through anything you need to know. We guarantee to beat any UK quote!

What does Key Person Protection Cover?

Key man insurance in the UK covers a variety of situations. This includes the following:

Life Only Key Person Cover: A life-only policy covers you for death only, but not critical illness. Some Key Person Insurance UK providers will include terminal illness
Life & Critical Illness: This can be bolted onto the Key Person Insurance cover or taken out on its own
Key man income protection: This will pay out if the person is unable to work due to sickness or injury

What Can Key Person Cover Be Used For?

You can use Key Man Insurance in the UK to cover a variety of expenses. This includes:

Lost profits: cover the costs of lost net profits, sales, and revenue that the company would have earned if the key individual were still able to work
Recruitment and training costs: cover the costs of recruiting and training a replacement
Debt repayment: cover loan repayments or other debts that the business has taken on in the name of the key person
Operating expenses: cover the costs of operating the company while it adjusts to the sudden loss of a key person

How much Key Person Insurance Do I Need?

The level of cover you need depends on various factors. For one, you need to consider the financial impact of losing a key person. Would you see a loss in revenue or increased expenses, such as recruitment costs? Think about what business disruptions you may face and how long it may take to recover. You should consider the current valuation of your business and how much the role of the key person is contributing to it. The Key Man Insurance can cover various expenses, so you should weigh up the potential costs and what you want the insurance to cover. This could include recruitment and training costs for a replacement.

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.

How much does Keyman Insurance cost?

This depends on various factors including:

The key person’s age: the insurance will cost more the older the individual is
Health: ongoing health issues, such as high blood pressure, can mean higher premiums
Smoker status: a key person who smokes will have a higher premium
Hazardous hobbies or activities: these will make the premiums more expensive

Is It a Tax-Deductible Expense?

Key Person Insurance premiums can be offset against cooperation tax relief. Your business owns the policy and pays for the premiums. These premiums can be tax deductible, but some stipulations need to be met. You can read our handy guide about Key Man Insurance taxation for more information.

How long does it take to set up a policy?

It’s simple to complete our Key Person Insurance application. You can do this online or over the phone with an advisor. We’ll ask questions about the person’s medical background during the application. The application will either be accepted online or passed to underwriters who assess the policy risk. The policy may need further underwriting, such as a GP report or medical.

Best Price Guarantee For Business Protection

Rated 4.9 Out Of 5 Stars On TrustPilot –check out our reviews…

MyKeyManInsurance.com was Established 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.
Quote and apply online and be covered the same day!
Authrised & Regulated By The Financial Conduct Authority
We are a whole market broker able to quote from all the UK providers.
GUARANTEED Lowest For Business Protection In The UK.
Free trust set up.
5 Star Trust Pilot reviews, our customers love us!

Our Customers Love Us!

What people are saying about us.

Excellent service with easy to
understand explanations

Jody was very helpful in explaining the options and I thoroughly recommend his company

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.

First Class Service

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.

Further Reading

FAQs About Key Person Insurance

What are the benefits of key person insurance?

There are various reasons why your company may want to consider Key Person Insurance. The cover helps protect the company against disruption in trade or stunted growth should a key person become ill or die. Without this type of insurance, the business could run into financial difficulties and risk a loss of revenue, particularly if the key person is a director or has a specialist skill set that can’t be easily replaced. The insurance money can be used where the company needs it most to help the business recover from the loss of the key person.

What are the disadvantages of key person insurance?

Depending on the level of coverage, the premiums for Key Person Insurance can be high. The price of the premiums is influenced by factors such as the key person’s health, age and role within the company. If the named key person is older or has a pre-existing illness, the premiums will likely be higher. The insurance also only covers named people, which means the company may need several policies if it relies on multiple key employees.

Who is the beneficiary of a key person policy?

The company pays the premiums for Key Person Insurance and is the beneficiary. If the key person becomes ill or dies, the company can decide how they wish to distribute the insurance money within the business. This could involve repaying any outstanding debts or covering recruitment costs to replace the key person.

What happens to my key person insurance if an employee leaves?

You have several options if the insured key person leaves. You can review the insurance policy and cancel it. Alternatively, you could transfer ownership to the life assured and change the policy to a normal life insurance policy.

How to prepare for the worst with key person cover?

By paying for Key Person Insurance, the company is protecting itself should the insured key person leave the company. The company has a financial solution to fall back on and won’t risk financial difficulties through a loss of revenue or increased expenses such as recruitment or training costs.

Should I write key person cover into trust?

Key man insurance isn’t typically written into trust because the company is the one who pays the monthly insurance payment. After a successful claim, the insurer will pay the company directly, which means there isn’t any need for a trust to be in place.

Key Man Insurance UK Specialists