Request a Key Person Insurance
Keyman InsuranceYour business is where it is today, ultimately because of your people. This said, we know that there is a particular individual without whom your business simply would be unable to operate. We recognise this. Key Person Insurance allows your business to survive the loss of a key individual by paying out a lump sum benefit to your business if they were to die. This benefit will help you cover your opportunity costs and any costs incurred in finding and training a suitable replacement for your key individual.
We will provide you with several quotes from the most trusted insurers. Fill out your details below to get the process started.
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Keyman Insurance
Why Do You Need Key Person Assurance?
Every good business needs a proper succession plan. Your business needs to be able to continue even if you or a key person in your business are no longer alive or healthy. Keyman Insurance gives your business a fighting chance even after the loss of an individual that plays a crucial role in the business.
Keyman Insurance
How Does It Work?
How Does It Work?
A Keyman Insurance Policy provides a lump sum benefit if a business owner, executive, or top salesperson dies or becomes disabled. This kind of Life Insurance Policy is owned by the business to give the company or its investors comfort that the business will continue with minimal interruption if something happens to the key person. The benefit amount is usually tax-free and may be used in any manner seen fit by the business.
How Much Cover Is Needed?
An excellent way to know how much Keyman Insurance cover your business will need is to calculate how much the company will lose if its key man dies or becomes disabled. There will also be costs involved in sourcing and training a suitable replacement for your business’s Key Man. This process will also take time, and your business may not be making any money until your replacement has completed training.
What If It’s No Longer Needed?
You can cancel your policy anytime if you no longer need your Keyman Insurance. Unfortunately, since Life Insurance backs Key Man Insurance, the benefit does not accrue an investment value, nor is it transferable. You will need to apply for a new Key Person Insurance policy for your new Key Man if your key person decides to leave your organisation. Getting a new policy is relatively easy to do.
What Should It Cover?
Your Keyman Insurance should cover the financial loss suffered during the death or disability of a Key Man in your business. Any loss in revenue or cost to find and train a replacement should be considered when determining your coverage amount. You also need to bear in mind the duration of time it will take to recruit and train your potential successor to your Key Person.
What About Taxes?
If structured correctly, the benefit amount on your Keyman Insurance should not attract any tax. Be sure to discuss your tax implications with your Perennity Financial Adviser and your accountant. Taxation is something you need to plan for ahead of time to ensure that your benefit payment will be able to serve its intended and keep your business from going under after the loss of your Key Man.
Are There Benefit Limits?
Every insurer has the discretion to set general benefit limits of their Key Person Insurance offering and limits specific to your organisation based on their assessment of your organisation. In general, the limit for Life Cover on Keyman Insurance is R10mil, while the limit on Disability Cover on Key Man Insurance is R50mil. If you need more, we will use multiple insurers.