In many small businesses, an employee or a partner can make or break its financial success. Running a venture without a key person’s support could lead to significant losses.
What Is Key Person Insurance?
Key Person Insurance is a form of life insurance of specific partners or employees relied upon by small businesses. Often these losses have a substantial adverse effect on the company. With Key Person Insurance, the business is the beneficiary since it will suffer the most casualties. Likewise, the business is the one who pays for the premiums as well.
This type of insurance helps business reduce the risk of disruption when paying death benefits that prove to be critical to the business’s overall operation. Key Person Insurance helps the business recover from losses and keep them afloat and productive.
Why Choose Absolute Insurance?
Absolute Insurance has been providing quality Key Person Insurance in Perth for more than two decades.
If you rely heavily on a partner or employee’s expertise, Key Person Insurance will cover disability and death of specific partners and employees. Your business will receive a lump sum that will include financial costs like loss of knowledge, training replacement costs, rebuilding clientele and debt related to the loss of the key partner or employee.
Key Person Insurance by Absolute Insurance allows partners to insure each other while ensuring a smooth and secure transfer of ownership to the surviving partner.
How Much Key Person Insurance Do I Need?
The amount of Key Person Insurance you need depends heavily on the scale and needs of your business. Generally, you can get as much Key Person Insurance as you see fit.
For example, if you run a restaurant, then you should opt to have a Key Person Insurance for your head chef. If the business is run by a partnership, then you should also have yourself and your partner insured to ensure than any sudden losses would not permanently paralyse the company.
Who Can Take Keyman Insurance?
Keyman Insurances are taken by business or companies since the entity is the beneficiary. The surviving employer or partner will be the one to process any claims regarding Keyman Insurances.
What does A Key Person Insurance Policy Pay For?
Keyman Insurances, like every other insurance policy, have varying factors that affect the cost of the premium. The type of policy purchased, the plan for the death benefit, and the employee’s or partner’s current health and lifestyle are deciding factors for the insurance premium.
Is Key Person Insurance Tax Deductible?
The cost of Key Person Insurance is often non-tax deductible. The monthly premiums will be paid after-tax dollars.
Usually, When the insured passes away, the business or company will receive the lump sum benefit free from income taxes.
As the insured employee, there are no tax implications for you since it is not considered part of your taxable income.
CLAIM YOUR FREE CONSULTATION
Want to find out more or not sure where to start? Get in touch for your free consultation. We’ll meet you at a Perth location that’s convenient to you to discuss how we can help you.