Key Person Protection

Key players in team How would you cope without the key players in your team?

What is Key Person Protection?


Key Person insurance, is a policy designed to pay out an agreed cash sum if a key employee suddenly stops work due to death or a critical illness. The payout might represent the loss of business income as a result of the loss of the employee, or perhaps the cost of recruiting and training a replacement. It might also represent the cost of providing sick pay to the Key Person, in the event of a Critical Illness. If the policy pays out the proceeds go directly to the company and not to the individual.


Who is a Key Person?


A Key Person is anyone who plays a key role in the company and especially those directly related to profit generation, such as key sales, design or marketing personnel - in fact anyone central to revenue generation for the Company.


Who pays the premiums and are they tax-deductible?


The Company pays the premiums, which may treated as a business expense. However, if treated as a business expense, it is likely that any claim proceeds would be treated as business income and therefore be potentially taxable.


How are premiums calculated?


The premiums will normally depend on a few factors:

  • The age of the Key Person to be insured
  • The health/medical conditions of the people to be insured
  • The chosen sum assured and term.
  • These factors mean that each Key Person's premium will vary.


Do we need Key Person Cover?


Ask yourself; if one of your revenue generators dies or suffers a critical illness, how much will this affect profits? Will they remain sufficient to pay fixed costs. What will be the cost and time involved in recruiting a replacement?



Contact us for a quotation for Key Person Cover


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"Money in Person" is a trading style of Medics Financial Services Limited who are Authorised and Regulated by the Financial Conduct Authority. We are entered on the Financial Services Register No 131216 at Registered in England and Wales No. 1723058 Registered Address: Tamworth Enterprise Centre, Corporation Street, Tamworth, B79 7DN