A Key Person Benefit pays a weekly benefit in the event of the life assured (key person) being disabled and unable to work, due to sickness or accident.
What would happen to the business if you or a key person was unable to work – could the business function at the same level as before? Would the business survive? How long would the business survive?
Many business have key staff, often with highly specialist skills that would take time to train or recruit. Every temporary replacement places an additional financial burden on a company.
The loss or death of an owner, business partner, majority stockholder or someone who creates significant revenue for the business, could mean financial ruin for the company.
Key person Benefit policies may include:
- Renewable terms to age 65
- Waiting period options between four to thirteen weeks
- Fixed weekly benefit options, e.g. $500, $750, $1000 or $1250
- Worldwide coverage
- Personal accident – disablement or death
Issues to think about:
- Recruitment costs
- Finding a successor or training one
- Disruption of unfinished projects
- Loss of profits
- Loss of control
- Securing finance
- The loss of specialised skills may result in loss of contracts or difficulty in meeting obligations
- Loss of goodwill
Who are Key People?
- Anyone deemed vital to the future of the business
- Research experts
- Sales managers and their contacts
- Business owners
- Anyone who has secured finance or loans
- People with specialist skills
- Staff who are crucial to the daily running of the business