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Key Person Insurance

Key person insurance is a specialist type of cover that protects a business in the event of a crucial member of staff becoming unable to work due to critical illness or death. Sometimes also called keyperson insurance, for some businesses key person insurance can be the difference between business failure and survival.

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Why is key person insurance important?

Key person insurance is a specialist type of cover that protects a business in the event of a crucial member of staff becoming unable to work due to critical illness or death. Sometimes also called key person insurance, for some businesses key person insurance can be the difference between business failure and survival.

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What is key person insurance?

Often, a business relies heavily on the skill, knowledge, and performance of an individual (the ‘key person’) who contributes significantly to the revenue and profitability of the business. This could be a director, senior manager, or any other employee, who, if they were unable to work or if they passed away, would result in a disastrous impact on business activity or profitability.

Key person insurance offers a lump sum payment to the business, to cover the cost of replacing the staff member or director, or to cover retraining costs, or offset the loss of revenue and profits from the loss. If the business had to claim on their key person insurance, they could receive a tax-free lump sum amount to cover the deficit.

Key person definition

Key person insurance should not be taken out against all members of staff: the premiums alone would mean it was not a cost-efficient decision. The business needs key person insurance only if the individual plays a significant role in the financial performance of the business. You need to consider how expensive it would be to replace them or the impact on profitability before you take out key person insurance against them.

Active Mortgages - The UK's Leading Mortgage & Finance Specialists

Expert key person insurance advisers

Active Mortgages can help you assess the suitability of key person insurance cover for your business and help you figure out how much you should cover the key person for and what you can afford. Braced with this information, as well as more information about your business, the team of experts insurance advisers at Active Mortgages will find the right deals for you.

We work with a range of clients from straight forward to complex client situations, to find the right key person insurance for them. We have a team of key person insurance experts that know where the best deals can be found and work closely with the insurance providers. This leads to special deals that might not be available to individuals, so it can pay to use Active Mortgages to find your deal.

Booking a consultation is easy, simply let Active Mortgages make it happen for you. 

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