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Key person (key man) insurance

In many businesses, a single person holds the key client relationships, technical knowledge or management of the business. Key person insurance, known in the market as key man insurance, protects the company against the financial loss their death or disability would cause.

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Key points

Key person (key man) insurance protects the business against the financial loss caused by the death or disability of a person who is key to the business. The beneficiary of the policy is the company itself.

The company is both the policyholder and the beneficiary. The payout allows it to cope with a drop in income, the search for a replacement or its financial commitments while it reorganises.

What it covers

Death
Payment to the company if the insured person dies.
Disability
Payment if the insured person suffers a disability covered by the policy.
Tailored sum insured
The sum insured is set according to the financial impact of their absence.

What to check before taking it out

Who is key
Partners, executives or technical staff on whom revenue or contracts depend.
The sum insured
It must be justified by the actual financial impact on the company.
The covers
Death, total disability and other possible covers.
The duration
The period for which the company needs protection.

Frequently asked questions

Who receives the payout?

The company, which is the beneficiary of the policy.

Is it the same as group life insurance?

No. Group life insurance protects employees and their families; key person (key man) insurance protects the company.

Can several people be insured?

Yes, each with their own sum insured.

How is the sum insured calculated?

Based on the financial impact of their absence: the margin they generate, the cost of finding and training a replacement, or the loans that depend on that person.