KeyPerson

KEYPERSON INSURANCE:

Keyperson insurance protects a business against the loss of  it’s ‘Key’ employees, shareholders and owners.

If you have staff within your organisation who play an integral role in keeping contracts and/or drive the sales of the company, therefore a portion of the profitability relies on that individual, what would happen if they were to die or become unable to work due to a long term sickness or injury?

KeyPerson or KeyMan cover provides a lump sum payment in the event of that staff member’s death or disability. If you have staff that are key to your business and it’s operating at full capacity, you may want to consider discussing the options with one of our Specialist Advisers on 1800 674 435 or by EMAIL
.

Purpose of a KeyPerson payment:

Loss of Profit in losing a staff member

Recruitment Costs associated with finding a suitable replacement
Salary to pay the new recruit
Any contractral arrangements linked to the exiting staff member

BUY/SELL INSURANCE:

Also taken out on a key indivdual within a business, a lump sum will be paid in the event of their death, disability or traumatic event to pay out the  exiting staff member estate.

Example: 3 partners own equal shares in ABC Pty Ltd.

The first partner dies and the estate is left the remaining share of the business, which gives authority to the beneficiaries. In this example, the wife of the late partner now owns a third of the company, but has never had experience in any field associated with the business.

There are a few things that happen to the business from this stand point:

1. The remaining partners may not have a good relationship with the spouse who now has full voting rights, including taking a salary.

2. Staff morale may be quite low due to the exit of the first partner. Job security is usually high on the thought process. (We arrange a standard communications pack to the staff in the event of a claim to help with this problem).

3. Contacts that had a relationship with the late partner do not wish to deal with the company due to all of the above changes and problems.

Many of these issues can be fixed through a Buy/Sell Insurance policy, accompanied by a Buy/Sell agreement making the transition of the shares to the remaining partners, and keyman cover will pay the remaining funds to cover the other issues.

If you are unsure, please CONTACT US
to discuss with you or your professional advisers how we can structure this correctly, which could literally save your business.