WHAT IS KEY PERSON PROTECTION?
If a key person of the business gets a terminal or critical illness, or dies then the Key Person Protection helps to protect that business against the financial effects.
When a key person can no longer work, this may lead to: reduced sales, recruitment costs, a loss of profit or turnover, increased workloads for the remaining employees, the disruption of development plans and wasted time.
WHO IS A ‘KEY PERSON’?
An individual who’s skills, knowledge, leadership or experience are so highly valued within the business that their absence (due to death or illness) would affect the profits of the company. Such as; sales director, IT specialist, technicians and head of product development.
HOW DOES IT WORK?
Key Person Protection is similar to life assurance written on the life of the key person, however, it is owned by the business (instead of a spouse or partner) so that any money owed becomes payable to the employer. Limited Companies and Limited Liability Partnerships both pay premiums. In the case of a partnership, the policy is written on an own life basis, which can then be placed in trust so that the other partners benefit.
Contact Finn Associates to find out more.