KEY PEOPLE

The serious illness or premature death of one of these key people could have severe financial consequences for your company:

• The investment needed to replace lost knowledge or experience may be significant.
• There could be a shortfall in profits as a result of the key person’s absence.

Years of personal contacts, goodwill and experience could be lost. If the key person has a shareholding in the business, the cost of acquiring these shares and maintaining complete control of the business may be significant. Possible dissolution of company.

Have you considered the consequences for your company?

Taking out International Term Assurance ensures that your business will be compensated for the financial loss that would occur from the death or extended incapacity of a key employee. This form of insurance is one of the most overlooked areas of business protection.

How much cover?

The amount of life cover depends upon the contribution the key person makes to the company. Shown below are a few ways you can calculate this.

Multiple of salary Between five and ten times a key person’s average salary including benefits, is a good method to consider.

Multiple of profits

Two times average gross profit, or five times net attributable profit, averaged over the last three years. This means that the sum insured is related to the potential fall in profits caused by the loss of the key person.

A flexible solution, you put plans in place to mitigate other business risks, so why not protect your employees as you would any other business risk?

International Term Assurance provides a flexible and comprehensive protection solution.

• It can provide funds upon the death, disability or critical illness of a key shareholder to buy out their share of the business. This leaves any remaining dependents with an income replacement, and ensures that surviving shareholders are able to keep control of the business.
• Critical illness or permanent total disability protection can cover the cost of a key person’s salary during a period of extended absence.
• Funds will be available to cover other business needs such as an immediate loss in turnover, paying off any company debt or the cost of finding, and funding, a replacement.

Protecting your business is vital in today’s market conditions. By taking out International Term Assurance you can protect your key employees and their dependents, as well as ensuring that should the worst happen, your business is in a strong position to move forward.