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  https://register.fca.org.uk/. Registered in England and Wales No. 1723058 Registered Address: 14 Albert Road, Tamworth, Staffordshire, B79 7JN.

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