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Expat Keyman Business Protection Insurance

Expat Key Man Business Protection Insurance
Expat Key Man Business Protection Insurance

Expat Keyman Business Protection Insurance refers to key persons in companies or businesses (eg: senior managers or the managing director). Keyman insurance refers to one of insurances that a company may be insured according to economic loss brought by the death of its key managers or specialists.

What is Expat Keyman Business Protection insurance?

If the key person passes away, their death to some extent brings forward economic loss for the company. Hence, a company under good management must buy key man insurance to avoid causing economic upheaval to the company in event that the key people leave the world.

Key Man Insurance is related to standard life insurance, however the policy’s coverage does not extend past the period of employment of the individual (or key staff member) being covered. Simply put, if your organization obtains a Keyman Insurance Policy for a staff member, that policy will lapse should the employee being covered leave the company.

Why Key Person Insurance Matters

The loss of an owner or a key personnel whose contributions are vital for a business to succeed can be devastating. It can result in a drastic loss of profit, customer base and even reputation thereby rendering the business useless. Protecting your business against such risks is a prudent step toward business continuity, while addressing the concerns of your key stakeholders. Using keyman business protection insurance can help the company continue on its journey with no financial harm.

When a person or people in a business add so much value or even ideas drive the business forward then are not around for the business without them it may bring losses to business to certain extent. Key Man life Insurance is a policy taken by an employer to mitigate financial losses in the event of a loss of key individual, whether it is the owner, important senior executive or a key contributor whose knowledge, work, or overall contribution is considered uniquely valuable to the business. Although it does not indemnify actual losses, the company will obtain a sum of insurance premium to make up for the loss so as to prevent itself from falling into the dangerous situation of liquidity problems.

Key Man Insurance Solutions

There are a number of situations that can occur where key man insurance plays its vital role in covering and protecting the business. One of the more rarer occasions is where if there are 2 directors of the company and 1 of the directors takes ill and dies, That leaves only 1 director around to continue to run the business. If he cannot run the business alone say due not having the experience of the other director. Keyman insurance has the ability for the family of the director that passed away to sell their share of the business and receives their value of the business for their 50% share. The remaining director could then have another director come buy in to the business and continue to keep the business running instead of the business folding.

Key Man Business Insurance – Things to consider

The cover amount: It is important to consider the benefit amount when taking out key person insurance. The actual amount would depend on a number of factors, such as the size of the business and the particulars of the person being insured.

The person to cover: In general, this type of insurance is often taken out to cover executives in the company or partners, since they play a very important role in the organisation. Small businesses where personal relationships are important are also typically covered.

Revenue or Capital Purpose: The Revenue purpose relates to protection against loss of revenue as a result of a key person no longer being able to contribute due to death, critical illness or total and permanent disability. The capital purpose entitles a business to receive a benefit to help pay outstanding loans, other capital expenses that occur should a partner be forced to exit the business.

Tax considerations: Since this type of insurance is geared towards businesses, it’s inevitable for tax issues to come up, especially when a claim arises, because it can be a substantial amount.

Possible Uses Of Keyman Insurance
  • Business succession planning
  • Business loan protection
  • Legacy planning
  • Executive retention insurance

Click here for next page Expat Life Insurance With Critical Illness Protection


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