Secure Your Business with Key Person Insurance

 

What Is Key Person Insurance?

Key Person Insurance (sometimes called Key Man Insurance) is a business protection policy that provides financial security if an essential employee, owner, or partner passes away, suffers a critical illness, or becomes disabled.

​

At Covermate Life, we understand that businesses rely on a few key individuals whose knowledge, skills, or client relationships are vital to success. If the unexpected happens, Key Person Insurance ensures your company has the funds needed to recover and move forward.

​

Why Businesses Need Key Person Insurance

The sudden loss of a business leader, top salesperson, or technical expert can cause:

• Revenue loss from disruption to operations or client relationships.

• Recruitment & training costs to replace the individual.

• Debt obligations that may become harder to manage.

• Investor or shareholder concerns about ongoing business stability.

 

Key Person Insurance helps cover these risks, ensuring your business remains financially stable and continues operating smoothly.

​

Benefits of Covermate Life Key Person Insurance

• Protects Business Continuity: Provides a financial buffer to manage immediate costs.

• Maintains Investor Confidence: Shows foresight and risk management to lenders, investors, and stakeholders.

• Customised Cover: Policies tailored for small businesses, partnerships, and larger organisations.

• Flexible Benefits: Cover for life insurance, total and permanent disability (TPD), and trauma/critical illness events.

​

Who Should Be Covered as a “Key Person”?

Key Person Insurance is suitable for individuals whose absence would significantly impact business performance, including:

• Company founders & directors

• Partners in professional firms (law, accounting, medical practices)

• Senior executives & CEOs

• Top-performing sales staff

• Technical experts or specialists

​

Frequently Asked Questions

1. Is Key Person Insurance tax deductible?
Premiums may be tax deductible if the policy is for revenue protection, but not if it’s for capital purposes (such as debt repayment or protecting shareholder equity). Always seek tax advice.

​

2. How much cover do I need?
This depends on the financial value the key person brings—often based on revenue contribution, debt exposure, or recruitment/training replacement costs.

 

3. What types of events are covered?
Policies can cover death, total and permanent disability (TPD), or trauma/critical illness.

 

4. Who owns the policy?
Typically, the business owns and pays for the policy, receiving the benefit if a claim arises.