What is Key Person Insurance?
Key Person Insurance compensates the business should that key person no longer be able to work due to death or sickness and your business requires a cash injection to survive.
We know first hand that everyone within a business is important in their own right, but there are going to be some members of staff that are crucial to operating successfully.
If you were to lose these key people, then your business could fail and you would certainly have a significant financial impact.
Business owners can then rest assured that any cost or potential loses, hiring replacements and business running costs are covered.
How much Key Person Insurance do I need?
How much cover you need to protect your business is your choice as a business owner as we have found one size doesn’t fit all when it comes to your business.
At Hooray Health & Protection, when we review with our clients the cover they require, some of the questions we ask them to consider are:
- How much does your key person contributes towards the business profits?
- Does the business have any outstanding debts that need to be covered?
- Are there any key clients or suppliers that rely on your key person’s relationship?
- How much would it cost to replace a key person?
When considering the level of cover you require, you need to talk through the above needs and many more before deciding what cover is right for you.
Businesses (SME’s in particular) are extremely vulnerable if they lose a key person and we understand the detrimental cost this could have on your business.
We always advise reviewing annually how you business would cope if a key person fell ill and would suggest ringing us today to discuss your options and current risk, as well as how you can mitigate against it.
How much does Key Person Insurance cost?
If we look at the price of key person insurance, it will massively vary across each provider, dependent on the application.
Key Person Insurance is underwritten, so it’s not a set price per person, but instead an assessment of the risk to the insurer – a term known as underwriting.
Insurers will first take into account the key persons age, medical history, whether they smoke etc., and decide a premium loading on the facts provided.
Next up, they will review the level of cover in comparison to your business risk and any other optional extras you may have included.
How long will it take for me to be covered?
Probably one of the questions we are asked the most is ‘how long will it take for me to get covered?’ and we happily help our clients get protected as quick as possible.
We will have an initial chat to learn about the business and requirements which takes on average about 15-30 minutes.
Next up, we run this thorough our panel of insurers, and as long as the amount of cover is around the average amount, the key person is healthy and there are no red flags, we can get protected straight away.
However, this is not always the case as every person is unique and the same applies to their business, so further information may be required.
If so, this can mean that we will have to refer this for medical underwriting, where it may be a form or potentially a full medical screening or GP report required.
We understand this isn’t ideal and this is where we can leverage our commercial relationships with insurers to ensure we are providing our clients with their terms quicker than going direct.
Why use Hooray Health and Protection for Key Person Insurance?
Hooray Health and Protection understands the variety of protection policies out there and we will make sure we find the right one for your Key Person.
We don’t tell you what to do; we work with you, finding out the key considerations for you, before advising on the right level of cover.
Our existing insurer relationships can help you find the best price, with the right advice.