Key Person Insurance and Why Businesses Should Have It
by Tim Abrams – Senior Financial Advisor | Walsh Group
Despite their utmost importance, many business owners can fail to protect their organisations from the difficulties that might arise following the premature death or illness of a ‘Key Person’ within their organisation.
Who exactly is a Key Person?
A Key Person is anyone who the company depends on for its continued success. It relies on the Key Person’s specialised skills, reputation and contacts and their death would have serious consequences for the profitability of a company. For example, your Sales Director will have strong ties and relationships with your key clients and your Finance Director undoubtedly has a well-founded link to your suppliers and bank.
How would your company cope with the loss of your most valuable business assets: the people whose talent, expertise and judgement contribute substantially to the financial health of your organisation.
What are the immediate impacts on your company?
- Loss of profits.
- The repayment of bank or company loans for which the deceased may have given a personal guarantee.
- The requirement to immediately repay to the deceased’s estate any loans or capital sums provided by the Key Person to the company.
- The loss of the Key Person’s business contacts, jeopardizing future sales.
- The postponement or delay of a specialized project which may be critical to the company’s future and which was managed by the deceased.
What is the solution?
Key Person Insurance offers you a cost-effective option to put the measures in place now to safeguard your business in the event of the death of a key employee, and maintain its continued financial stability in the future.
How can your company use the proceeds of Key Person Insurance?
- Pay off outstanding bank loans or any loans made by the individual to the company.
- Recruit and train a suitable replacement.
- Invest back into the business for improvement purposes.
- Protect the company against loss of profit.
If you are a business owner and would like to know more about Key Person Insurance or any other business protection options, please don’t hesitate to get in touch with us here at Walsh Group. We will take the time to understand your business and key person dynamic, give you impartial advice and quotes from the top five life companies in Ireland, and tailor the need and advice to a solution best suited to you. Why not take the next step and book a consultation now.