Keyman Protection (or Key Person Insurance) is a type of insurance policy designed to protect a business against the financial losses that could result from the death, critical illness, or long-term disability of an essential team member. This coverage ensures business continuity during challenging times.

A Key Person is anyone whose skills, knowledge, experience, or leadership is crucial to the business's success. Common examples include founders, directors, top sales personnel, or specialized technical experts.

Losing a key person can lead to:

• Revenue loss.

• Delayed projects or halted operations.

• Increased recruitment and training costs.

• Loss of investor or customer confidence.

Keyman Protection provides the financial buffer to navigate these challenges.

The business takes out a policy on the key person and pays the premiums. If the insured key person is no longer able to work due to death or critical illness, the policy pays a lump sum to the business. This payout can be used for operational stability, debt repayment, or recruitment costs.

The coverage amount is typically based on factors like:

• The key person’s contribution to business revenue.

• The cost of replacing their role.

• Business liabilities that may need to be addressed in their absence.

Consulting a financial advisor can help you assess the appropriate coverage level.

In many cases, premiums are not tax-deductible. However, the payout received by the business is typically tax-free. Always consult a tax advisor for guidance specific to your circumstances.

Yes, a business can take out separate policies for multiple key individuals. Each policy is tailored to the specific risks and contributions associated with the insured person.

Keyman policies can cover:

• Death.

• Critical illness.

• Permanent total disability.

The extent of coverage depends on the policy selected.

The cost varies based on factors such as:

• The insured person’s age, health, and lifestyle.

• The level of coverage required.

• The length of the policy term.

Getting quotes from multiple insurers can help you compare costs.

Policies typically last for a specified term, such as 5, 10, or 20 years. Some businesses choose policies that align with key projects, loan terms, or the tenure of the key person.

While a business can operate without Keyman Protection, doing so increases financial risk. This policy provides peace of mind and stability during unforeseen circumstances.

You can apply by contacting an insurance provider or broker who specializes in business insurance. They will guide you through assessing your needs, choosing the right policy, and completing the application process.