Ask the Expert – Keyman Insurance
What is keyman insurance?
Keyman insurance is insurance for individuals in the company who are deemed key people and a key asset to the business, where the company cannot run without them. It protects business against the loss of an important member of staff, by providing funds to find a suitable replacement.
What are the different types of keyman insurance?
Life only or life and critical illness cover.
Is keyman insurance tax deductible?
Premiums for these policies are tax deductible they are as they are used wholly and exclusively for business purposes.
Does keyman insurance only cover the directors of a company?
No, keyman insurance can be for anyone in the company that is deemed crucial to the smooth and functional running of the company.
How does keyman insurance work?
Keyman insurance pays out if one of the people insured is deceased, this payout can be used to cover costs of finding a replacement or in place of profits lost. If you have critical illness cover, if a member of staff who is insured on this policy becomes ill and cannot work the policy would then pay out. This provides funds to cover the recuperation period.
How large does a company have to be to qualify for keyman insurance?
Business of all sizes can qualify for keyman insurance.
What type of businesses can get / need keyman insurance cover?
Any business can get keyman insurance cover, however depending on the occupation it may be more expensive e.g. it will be more expensive for a construction worker than an office worker.
Is keyman insurance expensive?
The price is dependent on a variety of factors such as how long the policy is taken out for, you need to calculate how long you think staff member will work for the business and how much they would cost to replace. As well as factors such as age, gender, occupation type, if the individual smokes and health and medical conditions.
What information does BDfSO require to provide quotes for keyman insurance?
Information that BDfSO require would be age, gender, DOB, address and postcode, occupation and position in the company, salary, purpose for cover, number of people in the firm, number of people being considered for cover and why, whether the company is sole trader, Ltds, LLP or PLC
How can we pay for the keyman insurance policy?
The business can pay for the policy through the company bank account via direct debit