Key Person Insurance

A simple explanation for this type of policy is when a company puts, Key Person Insurance, which can also be known as – key man insurance – Is when a business puts protection in place by insuring itself against the financial loss it would suffer if a “key person” in their business died or were diagnosed with a specified critical illness if chosen, during the length of the policy. A key person could be for example the “Leadings Sales” generator within the company.  this is because, if something was to happen to this person the companies’ profits would be affected. Which would influence company turn over, which in course would impact on the ability to retain its other members of staff. Because it doesn’t have the same level of income being generated within the business.   

This sort of coverage is important within small and medium businesses in-particular. Because the death of a key person in a company often causes the immediate death of that company. The purpose of key man insurance is to help the company survive the blow of losing, for example the person who makes the business work.