Key Person Insurance | Veros BlueStar | Sanlam Financial Planners Newcastle

ABOUT KEY PERSON INSURANCE

Why is it important to have key person insurance?

The most important asset in any business is its people. The ongoing profitability and sustainability and, as a result, the capital value of your business are largely reliant on the input of the key employees in the business. The loss of a key person could therefore pose a great risk to the business, and even lead to eventual ruin.

What is a key person

A key person is someone whose absence through death or disability will have a material effect on the future of the business. If the key person is lost to the business as a result of death or disability, then the business could suffer a direct loss – whether it’s decreased sales, the high cost of replacing a skilled employee, or the loss of profits or sales while a new replacement is being trained.

HOW IT WORKS

Key person insurance explained

Key person insurance is a simple, cost-effective solution that provides financial security and certainty for your business in the event of the death or disability of a key person. It allows you, as the business owner, to insure the life of a key person to cover the business against the expensive replacement costs, or to provide cover against a potential loss. The business has the option to insure itself against this risk in a tax-effective manner.

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