Businesses may want to protect the key employees within their firm – perhaps the key salesperson, or the IT manager without whom the business will not function properly. Keyperson protection can provide a fixed sum should the individual be unable work, or even die.

The benefit will be designed to cover the firm’s expenses in meeting any emergency costs, recruiting a replacement employee and protecting the future of the business.

The cost of key person insurance is broadly the same as a personal insurance policy, however, it is the company who pays the premiums.  Companies considering this type of insurance policy should check with their own inspector of taxes regarding the taxation position of both the premium and any benefit before they take out the cover.

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