Key Person Cover

Where a Company is very reliant on an individual employee it is prudent for the Company to insure against the potential loss of that individuals knowledge experience and expertise should they die unexpectantly.

The policy is normally affected in the name of the Company whereby the benefits are for the benefit of the Company and not the individual’s estate.

The amount of cover can vary but usually involves looking at the amount that individual has borrowed from the Company, if any, and the costs of sourcing and replacing that employee with someone of similar experience and qualification. Potential loss of profits for a period could also be considered in calculating the amount of cover.

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