CCW Global is able to provide comprehensive Key Man Life insurance options to businesses in Hong Kong, China, and throughout the APAC region.
The success of any given company or organization will largely be dependent on the organization’s members or employees. While businesses frequently protect their physical assets against loss or damage, including the physical structure of their office or the contents and equipment inside of it, many companies will forego insurance protecting the organization from the loss of a critical member of staff.
From founders of a Start-up company, specialists who have developed and are sustaining a business’ strategy and direction in a key area, and top sales staff who bring in vital accounts to the organization, through to the entire senior management staff and members of the organization’s board of directors, a key person can appear in many different roles throughout a business.
Losing a key person who is of critical value to a company can result in a number of extreme outcomes – not in the least of which is a loss in the company’s profits stemming from the absence of the individual. However, outside of a loss of profits are also a number of concerns for any organization; delays in completing business transactions and contracts, interruption of ongoing business and sales, loss of competitive advantage and direction, increased pressure on remaining staff, deterioration of employee morale, and recruitment expenses to replace the employee are all issues stemming from the loss of a single key employee.
Unlike Group Life Insurance cover, which is intended to provide a benefit an employee’s family in the event of the worker’s death, a Key Man Life Insurance plan benefits the business against the loss of a vital employee.
A Key Person Life Insurance policy is a form of life insurance which is purchased by a company to protect the organization against the loss of a key member of staff. From short term losses, such as temporary disablement or illness, through to a full disappearance of the individual, a Key Man Life Insurance plan is designed to assist a business overcome the many challenges involved with the departure of vital talent.
Under Key Man Life Insurance policies coverage is provided for insured workers in the event of critical illnesses (where the employee may return to work) and for death.
Under a Key Man Life insurance policy offering death benefits, the company will receive a settlement in the form of lump sum payment in the event of the death of the person being covered by the plan. The company can then use the settlement to ensure business continuity, covering any financial shortfalls resulting from the employee’s death, and with the expenses of finding a permanent replacement.
Under a Key Person Insurance policy’s Critical Illness Insurance benefit, the company will be provided with a settlement in the event of the key member of staff becoming seriously ill and having to take an extended leave of absence. In this situation, the settlement would be used to cover the costs of hiring a temporary worker to cover the employee’s absence, and can be used to supplement the company’s financials in the event of a profit shortfall caused by the missing key person.
Key Man Life Insurance policies will have their premiums calculated based on the total amount of protection being offered to the business by the plan.
Typically, the amount of cover offered under a Key Man Life Insurance plan will be based on the salary of the employee being insured. This amount will need to be established prior to underwriting, and will normally have to be proven to the insurance provided that the insured individual is earning the salary that has been declared.
Because the specifics of the coverage will vary depending on the specific company and employee being insured, and will change dependent on the specific insurance provider carrying the risk of the policy, it is important to ensure that all aspects of the premium and total policy benefit are accurate before commencing with coverage.
If your company would like to investigate the suitability of Key Person Life Insurance, or if you would like to learn more about this type of corporate insurance in Hong Kong, China, or the Asia Pacific Region, please Contact CCW Global to arrange a free no-risk no-obligation consultation with an expert insurance broker.
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