Key Man Life Insurance Coverage
Key Person Life Insurance policy
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.
Key Person Insurance Death Protection
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.
Key Person Insurance Critical Illness Protection
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.
Overall Coverage Limits and Premiums
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.
Free Key Person Life Insurance Consultations
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.
You can learn more about the extended services CCW Global offers to companies and businesses by clicking About CCW.
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