This is an insurance cover purchased by a company on the life of a key person within the organisation to protect the company against loss of profit or cost of replacing the key person in the event of demise. The aim is to compensate the business for losses and facilitate business continuity.
A keyman can be anyone directly associated with the business whose demise can cause financial strain to the business; such person could be an employee, an owner, a director, a shareholder, etc
Benefits of Keyman Insurance:
- Guarantees ability to meet financial obligation
- Replaces profit that ordinarily would have been lost
- Provides funds for meeting the cost of replacing / training a successor
It has been designed to ensure that your family will always have a roof over their head even in the event that the unexpected happens. It is a form of decreasing Term Assurance. It is used to repay outstanding balance on mortgage when demise occurs. Eliminates the risk of one’s family losing its home in the event that you pass on before your home mortgage is paid off. Not a substitute for the primary responsibility of the borrower to repay his credit facility when alive. The benefits are paid directly to the lender i.e. mortgage institution.
They are investment-linked products that have been designed to help you save money according to your needs with the added benefits of affordable insurance plans.