Business protection
Keyman (key person) insurance is a life insurance policy a company takes on the life of a person critical to its success, usually a founder, director or a specialist whose loss would hurt revenue, financing or continuity. The company pays the premium and is the beneficiary.
The sudden death or disablement of a key person can stall projects, spook lenders and cost the business its most important relationships. Keyman cover gives the company a cash sum to absorb that shock: to cover lost profit, recruit and train a replacement, reassure banks and creditors, or fund an orderly transition.
It is a business asset, not a personal one. The policy is owned by and paid out to the company, not the individual's family.
Founder-led companies where one person drives sales or product. Firms with debt whose lenders rely on a specific individual. Partnerships and SMEs where a single technical expert, rainmaker or relationship-holder is hard to replace. Startups whose valuation rests on a small founding team.
Cover is usually sized against the person's contribution to profit, the cost to replace them, and any loans their absence would put at risk. Tax treatment of premiums and payouts follows the current Income Tax rules and has changed over time, so confirm the present position with your CA before you structure it.
As independent advisors we compare term-based keyman structures across insurers and help you set a defensible sum insured rather than a round-number guess.
The company owns the policy, pays the premium and receives the payout. It is a business protection tool, not personal life cover for the individual's family.
It is usually based on the key person's contribution to profit, the cost and time to replace them, and any business loans that depend on them. We help you arrive at a defensible figure.
Premium deductibility and payout treatment follow the current Income Tax rules and have changed over time. Confirm the present position with your chartered accountant before structuring the policy.
Related: Group Term Life · Term Life · Talk to an advisor