Summary

Keyman Insurance is the most overlooked of all business insurances especially for small businesses where the need is greatest. This article argues that businessmen should insure the risks.

Memo to myself - Get Keyman Insurance. Page 2

Author: Michael Challiner

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Life Insurance News

businesses employ less than 10 people and these are precisely the organisations most at risk from the impact ( loans ) of severe illness or death of a key person. The risks of a key person being stuck down with a long term illness or death are real. 1 in 5 men suffer a critical illness before their normal retirement age. Then there's the M1. The fact that it hasn't happened so far might just mean your business has just been lucky.

Now to those actuarial boffins in insurance companies, risk and luck are flip sides of the same coin. And they can provide insurance cover for most risks. After all they too ( cheap mortgages ) want to increase sales. But they're scratching their heads about Keyman Insurance. Most of Britain's 4.1million small businesses should have it but few do. What can it do? It can be structured to:

Provide an income stream to the company whilst the key person is incapacitated (compensation for the lost contribution ( life insurance advisers ) from the Keyman)
Provide a lump sum to the business in the event of death (pay off the overdraft or simply bolster cash flow?)
Provide money for remaining shareholders to buy the shares from the original shareholder or their estate

You'll need to talk to a Financial Adviser about these issues but ( car insurance cover ) they are all insurable. Can your business afford to take a risk it doesn't need to?

Memo to myself - get Keyman Insurance!