It is an old cliche, but a true one nevertheless, that one of the most essential elements in the success of any business is the quality of people working within it. However much the nature of business life changes, this won't.
Small businesses are particularly relevant here. In the UK alone, around 4 million businesses run on 4 people, and over 95% of businesses have less than 10 people working for them. These are the businesses which need to give some time and thought to the purchase of Keyman insurance polices, with especially close attention to Keyman life insurance.
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.
Without a doubt this is by far the most useful use that keyman can be put to, but it has to be said, not the only one. Let me explain, if a shareholder or business partner actually dies very soon their estate will come knocking at your door for their share of the company. If you actually consider this think when this happens will you have the funds to actually give them when they come calling? If not the business could be put into a critical position through no fault you yours or theirs. Well, it is for this reason that Keyman life insurance is so beneficial, key-man life insurance would essentially pay out and give you the funds to pay the estate and therefore discharge any claim they might have over the business.
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.
So in essence, taking out Keyman Life Insurance is similar to taking out personal life insurance, except that you are insuring the lives of your employees. Also you as the insurance policy holder will be the beneficiary at the end of the insured persons life as opposed to the family members. There is even the possibility that your company could be claiming back tax relief on the policies taken out.
The fact is that for the security of your business - be it limited company, partnership, sole trader, or whatever - a Keyman life insurance policy will bring, at the very least, some peace of mind, but, possibly, it could help you face the nightmare of trying to replace the irreplaceable.
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