Why should you get keyperson insurance? In every company, there are valuable employees who are essential to the operations of the business. In the event that life’s circumstances like illness or other unexpected events take them away, a company can suddenly experience financial vulnerability due to the loss. Key person insurance protects the company from the loss of a business partner or employee.
How does keyperson insurance help?
A keyperson insurance policy belongs to the company. If an insured employee or partner dies, becomes disabled or critically ill, the policy provides a lump sum benefit that is generally tax-free. Keyperson insurance is not the same as a standard life insurance due to the way the ownership of the policy is structured. Although the basic definitions and benefits are similar, the purpose of the insurance and ownership are different.
New, international, small or large organisations can benefit from keyperson insurance. For the larger organisations, the purpose is to ease financial losses in case of the loss of a key employee. Most large companies identify people in various roles to ensure that different keypersons in the organisation are insured. This type of insurance will minimize the financial impact in productivity and profitability.
Smaller companies with partners can protect each partner. Proper buy and sell agreements will guarantee that the business can survive in case something unexpected happens to any one of the partners.
Learn more about key person insurance today from the leading financial advisers in Australia. Ask for a Keyperson insurance quote that fits your needs.