Business protection insurance
Key Person Insurance
Bright Life Protection: Key Person Insurance
Protect Your Business from the Loss of a Key Employee
Every business relies on a few key individuals to drive its success, whether they’re the top revenue generators or those who manage critical operations. If one of these essential people were to pass away or become critically ill, it could severely impact the company's finances and ability to operate. Key Person Insurance is designed to safeguard your business from this risk, providing a financial safety net to help your company recover and continue operating smoothly.
Our service compares policies from top UK providers to ensure you get the best coverage suited to your needs.
At Bright Life Protection, we help you find the best Key Person Insurance policies from leading UK providers, ensuring that your business is protected against the unexpected.
What is
Key Person
Insurance?
What is
Key Person
Insurance?
Key Person Insurance is a life insurance policy taken out by a business on the life of a key employee. If this individual passes away or is diagnosed with a critical illness, the policy pays out a lump sum to the business. This payout can be used to cover any revenue losses, hire and train a replacement, or keep the company financially stable during a period of transition.
Key Person Insurance provides businesses with a way to manage the risk of losing individuals whose absence would cause significant disruption to operations or finances.
The why
Why Key Person
Insurance is Important
Consider these three important facets of Key Person Insurance provided by Bright Life Protection…
Revenue Protection
If a key individual responsible for a significant portion of the company’s revenue is lost, the policy helps offset the financial impact.
Financial Security
The lump sum can be used to cover any business expenses or losses that arise as a result of losing a critical team member, helping your company stay afloat.
Operational Continuity
The payout can cover the costs of recruiting, hiring, and training a replacement for the key person, ensuring your business continues to function.
For whom?
Who Should Consider
Income Protection?
Income protection is an excellent choice for these groups
1. Identify the Key Person
This could be a company director, top salesperson, or any individual whose skills and knowledge are crucial to the business’s success.
3. Receive a Payout
If the key person dies or becomes critically ill during the policy term, the business receives a lump sum payout that can be used to cover financial losses or costs associated with replacing the individual.
2. Take Out a Policy
The business takes out a life insurance policy on the key person’s life, and the business pays the premiums.
The how
How does Key Person Insurance Work?
Key Person Insurance from Bright Life works by:
How Does Relevant Life Insurance Work?
The business pays the premium on behalf of the employee or director, and in the event of their death, the policy pays out a lump sum to the family or beneficiaries. This payout is tax-free, providing essential financial protection to their loved ones. Relevant Life Insurance is a standalone policy, which means that even if the employee leaves the company, they can continue the policy by taking over the premium payments.
Providers We Work With
At Bright Life Protection, we compare Key Person Insurance policies from several leading UK providers, including:
AIG Life
Aviva
Legal & General
Scottish Widows
Zurich
We ensure that you get a tailored policy that suits your business needs, protecting your company’s most valuable asset — its people.
about our key person protection
Why Choose Bright Life Protection?
At Bright Life Protection, we specialize in providing expert, independent advice to help businesses navigate their protection needs. With access to top providers and customized insurance solutions, we ensure that your business has the protection it needs to continue thriving, even in the most challenging times.
Get Started Today
Secure your business’s future with Key Person Insurance from Bright Life Protection. Contact us today for a personalized quote or to speak with one of our expert advisers.
Frequently Asked Questions.
Key Person Insurance is a life insurance policy that provides financial protection to a business if a key employee or executive passes away or becomes critically ill. The policy pays out a lump sum to help the business recover from financial losses and cover the costs of recruiting or training a replacement.
A key person is anyone whose absence would significantly affect the business’s operations or profitability. This could be a company director, a top salesperson, or any individual with specialized skills or knowledge that are difficult to replace.
The payout can be used to cover a variety of expenses, including:
- Loss of revenue
- Recruitment and training of a replacement
- Paying off business loans or debts
- Stabilizing cash flow during the transition
In the UK, premiums for Key Person Insurance are typically not tax-deductible as a business expense. However, the payout may be considered tax-free, depending on the purpose of the policy. It’s recommended to seek professional tax advice based on your business’s specific situation.
Yes, Key Person Insurance is particularly important for small and medium-sized businesses, where the loss of a key individual could have a significant impact. Small businesses often rely heavily on a few individuals, making this type of cover essential for financial stability.
The cost of Key Person Insurance depends on several factors, including the insured individual’s age, health, and the amount of coverage required. Businesses should work with an adviser to determine the appropriate level of cover for their specific needs.
Key Person Insurance typically lasts for a fixed term, which could range from 5 to 30 years, depending on the needs of the business. The policy can be renewed or extended as needed.
If the key person leaves the business, the policy can either be canceled, or the business can transfer the policy to a new key individual. Some policies also allow the individual to take over the policy personally.