If your business relies on certain employees it is important to  put protection in place in the event their death or serious illness could cause financial damage to your business.

An insurance policy often referred to as Key Person Insurance can be taken out on the life or health of such an employee.  This may be appropriate where that individual’s knowledge,  work, or overall contribution is considered uniquely valuable  to the company. It can cover the costs or losses that may be caused by the loss of that person.

Incentivising your key employees.

 

There are additional insurance products you might want to consider offering your key employees as part of their reward package, including:

•  Income replacement/protection cover - for times when they are absent from work due to long-term sickness.

•  Family protection insurance, by way of a relevant life policy. 

 

Proceeds of the policy would also usually be paid free of inheritance tax under a trust to your employee’s family.

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The policy only pays out in event the life covered dies or is diagnosed with a serious illness as defined in the policy conditions. There is no cash in value at any time.

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