Only Use Whole-of-Market Brokers!
When trying to secure key person insurance on limited funds, using the right UK broker can make a big impact.
Make sure you are using an independent, whole-of-market broker who works with all the major UK providers. This gives you the widest range of policy options to find the best match for your budget.
Ask brokers specifically about their whole-of-market access and make sure they DO NOT work off a limited panel of providers.
A limited panel can sometimes mean the panel has higher commission rates which in turn can mean higher premiums for the customer.
Let’s Talk Commission!
UK brokers must disclose their commission levels to clients upfront. This fee can sometimes be quite high, but can be manually reduced by the broker.
Enquire if they are willing and able to negotiate down their commission fees to help lower monthly premiums and fit key policies into tight budgets. The right broker should be willing to do this, but won’t always offer unless asked.
Focus on Your Most Essential Needs
Zero in on what key person insurance cover you need. Leave the “nice to haves” for another day. We have seen all types of UK businesses work within strained budgets but also make sure they have the right policy to cover their needs.
Strip it right back to the core staff members propping up the show. If you lost them tomorrow due to death or illness, what specific financial dangers would that expose you to? Those are your Must Cover Baselines.
From what I’ve seen with UK companies in your shoes, it often comes down to these make-or-break types of insurance needs:
Enough of a payout to hire and settle in a competent replacement – Recruiters and onboarding don’t come cheap!
Funds to prevent client losses from the disruption – Hard-won relationships walking out the door while the new staff member learns the ropes can kill cash flow
Covering debts the key person secures personally – Unexpected liability calls triggered by an untimely loss of your star player can sink viable businesses.
If you’ve got those bases covered as first priorities, then you’ve secured the essential backstop. Yes, you can still cause chaos by losing your top talent unexpectedly! But at least you’ve got fiscal damage limitation measures activated. Your doors stay open.
We can build out more bells, whistles and bonuses on top of that later down the line. But when funding that first key policy feels like squeezing out drops from a rock, the above areas are your best bet for that precious core protection on a constricted budget.
Policy Pick ‘n’ Mix – Let’s Get Creative!
Key person policies come in all shapes and sizes. It’s just about mixing and matching elements to cook up the right cover for your company.
- Level term deals – they deliver fixed payouts, for a defined amount over a term of time. Simple as that. Cost-effective security you can set and forget.
- Or decreasing terms, where the payout amount lowers over time. The overall reduced cover means a lower premium.
- Annual premiums if affordable will save you money too!
It’s all about finding out which policy ingredients bring the most budgetary joy to your situation. What looks like the recipe for success on paper?
So if we lay all the elements out in front of us, we can definitely concoct a strategy to hit your Must Haves without blowing the budget.
Make sure to speak to one of our advisors or feel free to use our quote form and find out how much a key man insurance policy will cost.
