Frequently asked questions about Keyman Life Insurance

Q. Does Keyman Insurance only cover the directors of a company?

No, Keyman Insurance is designed to provide cover for any key person within the company whose loss through injury, illness or death would be detrimental to the ongoing success of the business. This could include a combination of directors, sales people, team leaders etc.

Q. Are there restraints on what the benefit can be used for?

There are not normally any restraints on what the fund can be used for within the business, unless the policy was to secure outstanding loans. In this particular scenario the bank may call the loan in as the guarantor is no longer able to offer security and so the funds will be used to clear this debt.

Q. If the key person is already named on a life insurance policy and a critical illness policy, do they need to be named on a keyman policy?

Yes, Keyman Insurance should still be considered. Life insurance and Critical illness insurance is a personal policy which pays out should the named person pass away or be diagnosed with a listed critical illness. The benefit is usually payable to the next of kin. Keyman Insurance is a policy which is paid by the business for the business in the event of loosing the named keyman through illness, death or accidental injury.

Q. How large does a company have to be in order to qualify for Keyman Insurance?

As long as the company consists of more than one person then Keyman Insurance is worth considering. It is not about how many people make up the payroll but how detrimental would it be to the business to loose one of these people through accidental injury, sickness or death.

 

Guide Contents

Keyman Life Insurance
Different types of Keyman Life Insurance
Finding competitive Keyman Life Insurance
Frequently asked questions about Keyman Life Insurance
Where to get more help and advice about Keyman Life Insurance

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