Why Have Key-man Life Insurance
Every business has got to see the need for life insurance. If you aren’t already using Keyman life insurance, it is in your company’s best interests to take the time and read on. It could be time better spent than you think.
Business success can be almost measured by the quality of its staff. Good quality staff or personnel within a business can be its foundation and fundamental to its smooth and effective running. Regardless of what changes effect your business on a day to day basis this fact rarely will.
When looking at small businesses this statement is never more true. The United Kingdom has over 4 million small businesses that have fewer that five people working within. It is also a fact that of all the businesses in the UK no fewer than 95% have less than 10 people working in them. These businesses should more than any be thinking of keyman insurance and more so key-man life insurance policies.
As a business owner you know the people in whom you trust the running of your business every day. The people who make your business successful and continue to drive it forward. You know that without these people working on your behalf your business may not succeed.
It is in protecting these people that Keyman life insurance comes into it’s own. Keyman can help protect against the difficulty of losing an employee to prolonged absence or even death of an integral staff member, a factor which can be of crucial importance to the success or failure of your business.
This type of insurance is designed for you to sort out a contingency plan such as recruit a suitable replacement or even train someone up to take on their role and therefore maintain the business and its profits.
Important though this is, however, keyman life insurance can give you much more. For example, the loss of a vital financial stakeholder in your enterprise could have a disastrous immediate effect. Say a partner or shareholder dies. The remaining family members might wish to sell their interest and you might not be in a position to be able to purchase it. This could have tremendous ramifications. Keyman life insurance could provide you with the capital to buy the shares or partnership to solve your problem.
In addition say for example you borrow money but in order to secure the funds you have to arrange a guarantor and this person dies. This could result in the bank calling in their loan, what effect would this have on your business? Again Key-man life insurance would come to the rescue and redeem the loan so the bank would no longer have an interest at all.
It is clear to see that all key-man insurance is, is life insurance the difference is the reason you arrange it and essentially where the funds actually go. In the typical life insurance route the funds would go to the beneficiaries, in a keyman scenario the funds are discharged to the company for them to do with what they want. If you are looking on the internet you will find that just about all life companies have some sort of provision for Keyman or key person insurance. In some cases you might find that you can even claim some tax relief on the contributions that are made to the plan but this should be checked with your professional advisers first as there are ramifications to doing this.
The basic truth is that no matter what type of business you have, regardless of whether you are a sole trader or a multi-faceted international conglomerate, with Keyman life insurance you will be safe in the knowledge that no matter what possibilities lie ahead, you can concentrate on the important things. You, and your valued employees, can continue to be successful and keep your business growing.
Keyman insurance should be important for any business. Always ensure your business isn’t impeeded by having your employees protected with good Key Man life insurance