What is key person insurance?
Key person insurance is a policy taken out by a business on the life of a person whose loss would cause financial disruption.
The pay-out can help replace lost profits, recruit a replacement, reassure lenders or repay business debts.
Key benefits
- Protects revenue and continuity
- Can cover founders or senior staff
- Life and critical illness options
- Useful for lenders and investors
Frequently asked questions
A key person is anyone whose skills, contacts or leadership are critical to the business.
Usually the business owns the policy and receives the pay-out.
Tax treatment depends on the policy purpose and should be confirmed with a professional adviser.