Key Person Insurance

Insuring your company's assets is extremely important, but have you considered insuring the people and skills that make your company work?

Ask yourself these questions

How would your company cope if one of its key people were to die suddenly, or become unable to work due to illness or injury?
Apart from the personal shock,
How would it affect your company's viability?
Would your company have sufficient cash reserves to fill the vacancy with a quality temp while you look for a full time replacement?
Would you be able to meet your customers' orders, or would they need to move to a competitor to have their orders filled?

Insurance Quotes QLD can help you arrange key person covers that can provide your company with a lump sum, or a benefit paid monthly, in the event that a key person dies or becomes unable to work due to an illness or injury. These funds can help to pay ongoing expenses while you fill the vacancy or compensate your company for possible loss of new and existing business.

What is it Key Person Insurance designed to do?
For large organisations it is designed to assist them to overcome the loss of a key person. When a company loses a key person often profitability can be affected, and therefore insurance helps cover this loss.

For smaller companies with partners, it is designed to protect each partner. If a partner of a firm dies, usually the other partner or partners need to purchase the shares of the business from the deceased family. Having insurance permits this to be easily facilitated with correct buy-sell agreements in place.

What is a Key Person?

A key person is a person who the success of the business is dependent on for their experience, initiative, skill, knowledge and drive. Key people are the intellectual assets of a business and may include:

• Managing Director
• Working directors/Partners
• Financial Controllers
• Computer programmers
• Specialist engineers/designers/researchers
• Sales managers
• Anyone with a unique ability on which your business relies

Types of Key Person Policies

- Revenue Replacement

• Replace potential loss of income
• Loss would be reflected in the company's "Profit and Loss" statement
• Premiums may be tax deductible and proceeds are assessable for tax

- Capital Replacement of the key person

• Replace loss of capital or repayment of debt and/or loss of goodwill
• Loss would be reflected in the company's "Balance Sheet"
• Premiums are non deductible and proceeds are usually not assessable for tax (exception is Trauma cover.)

Events covered for the key person

• Death
• Total and Permanent Disability
• Trauma

Key Person Insurance Protection Coverage
The sudden loss, via death or disability of the keyperson could have a significant financial impact on your business which may include:

• Disruption to trade
• Loss of new business
• Loss of knowledge
• Loss of clients
• Possible re-financing
• Decreased profits

How Much Key Person Cover should be we consider ?
This is entirely dependent on the size of the business and the person that is to be insured. It could range from $500,000 up to $10m of cover.

How do I find out more?
Submit your contact details in the form below and a consultant will contact you to discuss options.

Key Person Insurance

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IMPORTANT : This information on this page is generic in nature and cannot be relied upon to determined what insurance cover you should establish. Insurance Quotes Qld and Associated Financial Planners Pty Ltd makes bears no responsibility for where your cover amount or type is suitable to your personal circumstances if you become a client.