Who should get key person insurance?

Key person insurance is essentially life insurance for a vital person within a company.

In large companies, it's common for the founding members, CEO's and even important members of staff, to have insurance taken out for the company in case anything happens to them. It protects the company from losses should anything happen to important money earners. In a small business, it's even more important to have insurance like this in place.

A key person could be the founders of the company, to any number of important employees. Anyone who without them, the business would suffer financial losses that could cripple the company.

The company pays the premiums and is the only beneficiary of the policy. If tragedy ever strikes and a vital person to your business unexpectedly dies, or becomes incapacitated, the policy pays a once-off lump sum - giving your company options, other than closing down immediately. Your company can use the pay out to cover costs until it can train-up or find a replacement. Alternatively, in the worst-case scenario, it can use the pay out to pay-off debts, pay investors and employees and close the doors without any financial hassle.

Key person insurance is not personal life insurance. Key person cover strictly covers your business's expenses so it can continue or close without leaving financial loose ends. That being said, it could save your family from having to pay-off your business's debts. If you have a family who depend on you, consider providing for them financially with separate personal life cover. You can read more about our highly customisable personal insurance here. You might also consider protecting your business even further with buy and sell insurance. It states what should happen to your share of a business and assets.

With us, you're able to develop and shape your insurance with the help of one of our consultants. No one likes to dwell on the worst-case scenario, but your employees and family will be grateful that you took steps to ensure they are financially secure if anything were to happen to you.

For more information about our customisable key person insurance, or any of the other assurances we mentioned here, why not speak to one of our brokers, contact us on 031 242 6800, or fill in a Request a Quote form online.