Put simply, keyman insurance (or key person cover) offers a cash lump sum to your company in the case of the death or serious illness of a senior employee, a director or the founder of the business.
How can we help?
Black Lion Insurance provides whole of market advice on a wide range of keyman insurance policies. We offer tailor-made advice to support the needs of businesses throughout the UK.
Pick up the phone and call us on 0203 146 2259 and we’ll be pleased to help you. We’ll discuss the level and length of cover you need, as well as other relevant personal details. For example, we’ll need information on the age of the person, their health, smoker status, family history and so on.
In the event of the death or serious illness of a key employee, our team will handle your claim with sensitivity and care, liaising with the insurer on your behalf to make sure that your claim is paid as soon as possible.
What does keyman insurance do?
Ultimately, keyman cover is designed to protect a smaller business from potential financial catastrophe.
It’s true that in a leaner organisational structure, should a high-performing key person die or be unable to work due to illness, their value to the business is lost. And, it’s gone quickly.
In essence, he or she may have brought valuable business development skills, a raft of business contacts or outstanding means to raise vital funds for future projects.
Consider these important statistics
Did you know that according to the Office of National Statistics, nearly 90% of businesses in the UK employ fewer than five people? And, that a healthy male aged 55 has a 1 in 12 chance of dying?
And..that 50% of people born after 1960 will be diagnosed with cancer at some point in his or her lifetime?
Apologies for these simultaneously startling and sobering statistics. However, in our opinion, knowing is better than not knowing. So, if business continuity is everything to you, talk to the experts at Black Lion about keyman insurance
What are the benefits of keyman insurance?
A key person pay-out could repay outstanding loans within the business, or fund the recruitment and training costs of their role replacement. Alternatively, it could help provide valuable monies to buffer a potential loss of confidence in suppliers and clients.
Also, although less tangible, financial support could mitigate a loss or decline in working relationships due to a fall in business contacts could also benefit your business.
In a worst-case scenario, keyman cover could even help wind down the company in a methodical, compliant fashion.
As you can see, there’s lots to think about.
Let’s get started.
Don’t let the death of someone in your business mean the death of your business.
If you are a business owner, we could help you achieve the peace of mind you deserve. Call Black Lion Insurance. It will be one less thing to think about in your busy working day.
What Are your Options?
Keyman Life Insurance
This covers your business in cases of death of a key person, or if they become terminally ill. It could help alleviate
Loss of business contacts
Problems in meeting load repayments
Difficulties in raising money for future projects or developments
Keyman Critical Illness Cover
Cover to protect your business should a key member of staff suffer a serious illness like a stroke, heart attack or cancer.
You can use the lump sum for anything in your business. You can also protect against numerous other losses that your business could suffer, including but not limited to the following:
- Loss of business contacts.
- Problems meeting loan repayments
- Difficulties in raising money for future projects or developments
Shareholder Protection Insurance
What is shareholder protection insurance?
Shareholder protection insurance provides your business with a cash lump sum, in the event of the death or critical illness of a shareholder.
The lump sum gives the remaining shareholders the right and finances to buy back the shares, so they can keep control of the business and trading can continue as normal.
This also gives the deceased shareholder’s family, or the shareholder themselves the opportunity to monetize the shares in the business.
What are the policy options?
Individuals take out a personal shareholder insurance policy
The individual takes out his or her own life shareholder insurance, which will last until retirement age. Premiums will be charged to the individual shareholder and be paid from post-tax income, therefore resulting in no tax relief.
It is important to take into account any differences between shareholders, such as age and health issues. This could result in older shareholders having to pay more for a lower level of protection. Equalisation ensures that HMRC do not view the policy as a ‘gift’ to younger employees or those with a smaller share in the business. Equalising means that the cost of insurance is divided equally between shareholders.
The business creates shareholder insurance policies on behalf of their employees
The company creates a policy for shareholders with the insurance premiums being paid for by the business. Therefore, this is seen is a deductible business expense for corporation tax. Furthermore, it is regarded as a benefit in kind for the shareholders, so will be taxed accordingly.
For both policy options, it is written into trust for the benefit of the remaining shareholders, and upon serious illness or death the insurance company will pay out to the other shareholders.
Accident and Sickness Insurance
Get in touch
We are a dedicated team of financial advisers, with years of experience in guiding our clients to a solution that meets their specific needs. We specialise in helping both employed and self employed individuals, as well as business owners on a variety of solutions, which range from life insurance, income protection insurance, keyman insurance and shareholder protection insurance.
The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.