This is an insurance policy to protect that business from potential financial losses that could arise from the death or extended incapacity of a key member of the business. The aim is to help protect the profits and financial viability of the business and the policy provides a fixed monetary sum.
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An employer may take out a key person insurance policy on the life or health of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company. The employer does this to offset the costs (such as hiring temporary help or recruiting a successor) and losses (such as a decreased ability to transact business until successors are trained) which the employer is likely to suffer in the event of the loss of this key person.
It is very important that the effects of taxation should be considered when setting the sum assured on key person cases.
Dave can help establishing the right level of cover and benefits to suit your circumstances and protect you and your business.
These types of plan will have no cash in value at any time, and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
This article is intended to provide a general appreciation of the topic and it is not advice.
For more information please contact Oakwood on 01483 266666 or email email@example.com and we will be happy to assist you.
Article expiry: 05 Apr 2019