The loss of a key employees can be devastating for a company. In the worst case scenario, it can turn a successful company into a failing one. For example, 70% of businesses stop trading within 5 years on the unexpected loss of a founder.
The percentage of companies that have Key Man Insurance is actually small. But a recent survey by Legal and general highlighted 95% of businesses have at least one key individual that the business mostly depends on for its main source of income. However the majority of those companies had no contingency plans in place to deal with the death or serious illness of that individual.
CB Financial believe key man Insurance should be specific for your company’s needs. We will provide a FREE no obligation quote specifically tailored to the individual/s you’re looking to protect.
The benefits of Key Man Insurance
- Protects the company from financial loss, in the event of losing a key employee through death, critical illness or terminal illness.
- Provides peace of mind.
- Indirectly protects the livelihoods of your employees as their jobs may be jeopardised should something happen to a key individual.
Key Person Insurance product considerations
Key Person Insurance if a form of Life Assurance. The concept of it paying a lump sum to the business in the event of death is very easy to understand. Complications arise in knowing how to calculate the level of cover. Some areas for the company to consider are:
- How will the Key Person Insurance be calculated?
There are broadly four calculations:
- Multiple of individuals salary
- Multiple of profits
- Proportion of payroll
- Actual impact method
- Would you like the premium guaranteed or reviewable?
- Do you want stand-alone Life cover for the company or an additional critical illness element to the cover?
Key company considerations
At CB Financial part of our objective is to obtain as much important information from you, so we can assist you to make the right decision for your company. Here are some of the key company considerations we will discuss, when helping you reach a decision:
- Who do you wish to cover in the business?
- Do the individual/s own a share in the business?
- Does the key person hold a unique position in your industry? For example, are they an expert in their field? Can they be replaced? Do they have a special client bank, and would these clients worry at the loss of the individual?
- What is the individuals’ role within the business?
- Have you considered a report from your company accountant or Financial Director to qualify an accurate potential loss?
- What are the problems you would encounter in the event of losing the key individual/s?
- What would be the direct financial loss in the event of losing the key individual/s?
- What would be the indirect financial loss in the event of losing the key individual/s? (i.e. Recruitment and training of a new person).
- How long do you wish to cover the individual for?
- What is your budget?
- What are the growth plans for your business and do you want the policy to move in line with this?
Request a quote
We believe we provide the most comprehensive service for Small Medium Enterprises, available. We will:
Have an initial discussion to find out your requirements.
- Quote the market
Find the most suitable product within your budget.
- Report and Recommendations
Report our findings, including a full recommendation outlining our reasons.
- Full Implementation
Implement the scheme and provide comprehensive communications to your employees so they fully value the benefit.
- Ongoing Support
Provide ongoing support to both you and your employees