Key Person Insurance
Because your team is your business’s greatest asset.
Key Person Insurance provides essential financial protection to keep your business stable when the unexpected happens.
Let’s take a look at what Key Person Insurance is, why businesses need it and how it can protect your company’s future.
What is Key Person Insurance?
What would happen if a key employee could not work?
Key Person Insurance is a business protection policy that pays out a lump sum to your company if a key employee dies or suffers a qualifying critical illness.
The policy is owned by the business and the payout is designed to:
Cash Flow
The payout helps your business continue meeting day-to-day expenses and financial commitments without disruption.
Cover Loss of Profits
It provides funds to offset the reduction in revenue caused by losing a key employee’s contribution.
Support Business Continuity
It gives your company the financial resilience it needs to continue operating smoothly while adapting to the loss of a key team member.
Safeguard your business now!
How Does Key Person Insurance Work?
Identify Key Individuals
Choose employees whose absence would significantly impact the business.
Determine the Required Level of Cover
This is typically based on projected profit loss, debt obligations, or the cost of replacing the individual.
The Business Owns and Pays for the Policy
Premiums are paid by the business, and the business receives any payout.
Claims & Payout
If the insured person passes away or is diagnosed with a critical illness (depending on the policy), the insurer pays out a cash lump sum to the company.
Use the Funds to Protect the Business
The money can be used for:
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Operational support
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Recruitment and training
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Loan repayment
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Stabilising cash flow
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Protecting goodwill and customer relationships
Who Can Benefit from Key Person Insurance?
Let’s have a quick look
Key Person Insurance is an important safeguard for any business that relies on specific individuals to drive performance, revenue, or strategic direction. Whether you’re a small business built around the expertise of a few people, a fast-growing company dependent on specialist skills, or an established organisation with key leaders overseeing major operations, the sudden loss of a crucial team member can have a serious financial impact. This type of cover is essential for:
- ESmall businesses and startups reliant on a single founder or team
- EGrowing companies building strong client relationships
- EBusinesses with specialist roles that are hard to replace
- ECompanies seeking investment or loan finance
- EOrganisations looking to protect future growth
If your business relies heavily on one or two key individuals, Key Person Insurance is a smart, strategic protection tool.
Not what you’re looking for?
How else can we help?
Life Insurance
Life insurance provides financial security for your loved ones if the unexpected happens. It pays out a tax-free lump sum to help cover mortgage payments, household bills, or future plans, giving your family peace of mind when they need it most.
Critical Illness
If you’re diagnosed with a serious illness covered by your policy, critical illness cover pays a one-off lump sum to help you focus on recovery. Use it to ease financial pressure, from medical costs to everyday living expenses, while you take time to heal.
Private Medical
Private medical insurance gives you quicker access to high-quality healthcare, with choice over specialists, hospitals, and treatment dates. Get peace of mind knowing you can receive prompt medical attention when you need it most, helping you get back to living life well.
Key Person Insurance FAQ’s
Is the payout taxable?
Tax treatment varies depending on how the policy is arranged and your business structure. Speak to a financial or tax adviser for guidance.
Can the key person be a shareholder or director?
Yes. Many policies cover founders, directors and shareholder-managers.
Do we need a separate policy for each key person?
Generally, yes - each person requires their own policy.
Does the key person receive any personal benefit?
No. The payout goes to the business, not the employee or their family.