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Work out individual key person requirements using our simple tool

Customer friendly video explaining why Key Person cover is important

Key Person Cover

    Cover by business type

Key Person Cover should be set up differently to match the needs of different business types. The table below can help show how Key Person Cover is best applied and how to get the most out of our policy.

Business type

Who should be insured

Benefits (separate policies should be set up to protect profits or clear debt)

How to set up the cover

Sole trader

Business owner or key member of staff

If the key person is an employee (not the business owner) the cash injection helps the company protect profits or clear existing debt.

Own life: the sole trader takes out the plan which is written in trust with their family/next of kin as the beneficiaries. If the sole trader dies, the money is paid to the beneficiaries (usually family or next of kin).

Life-of-another: sole traders can also take out Key Person Cover on an employee. The sole trader takes out the policy on a ‘life-of-another’ basis. Any claim is then paid directly to the sole trader.

Traditional or ordinary partnership

Partner or key member of staff

If one of the partners dies or has to take early retirement due to ill health, the remaining business owners would be responsible for any debt. Key Person Cover can be used to pay off the debt or keep the business operating.

If the key person is an employee (not the business owner) the cash injection helps the company protect profits or clear existing debt.

Own life: if the key person is a partner, the plan is on their own life, written in trust for all the partners. Any claim is then paid to the remaining business owners (through the trustees).

Life-of-another: if they key person is an employee, one of the partners takes out the policy on a ‘life-of-another’ basis, placed under trust for the benefit of all the partners.

Limited company

Shareholder, or key member of staff

The proceeds give the company a cash injection, which can be used to either:

Life-of-another: the company takes out the policy on a ‘life-of-another’. If a claim’s made, the money is paid directly to the company.

Limited liability partnership

Partner or key member of staff

0800 032 3962

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Business Protection Specialist Team

Option 1 – New and current applications

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Business Protection options

Find out more about the type of businesses we cover and the policies available.

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Our Business Protection includes valuable telephone support for your clients and their employees.

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FOR UK FINANCIAL ADVISERS ONLY
LV=, County Gates, Bournemouth, BH1 2NF, UK