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Infinite, sustainable growth ideas and examples for strategic thinking executives every Sunday

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Innovate Africa With Dotun Adeoye Every Sunday

Infinite, sustainable growth ideas and examples for strategic thinking executives every Sunday

Keyman 1

Key Person Protection Is A Critical Business Continuity Requirement.

Introduction

Key person protection is an integral part of any business continuity plan. The principal officials of any organisation are the soul of the organisation. Therefore, it is imperative to make provisions for any mishap that may happen to them at any time.

Key person protection can help your business protect against the financial loss of a crucial individual, such as a director or shareholder, due to severe illness or death.

Key person protection can help your business protect against the financial loss of a crucial individual, such as a director or shareholder, due to severe illness or death. Necessary person insurance is essentially life assurance which pays out in the event of death.

Key person insurance is designed for businesses heavily dependent upon one individual for their success and profitability. It covers the financial risk resulting from that individual no longer being able to perform the functions they usually do for the company to continue operating at its current level.

In some cases where there may be more than one person with critical roles within an organisation, it could also cover being unable to replace those skills at short notice, such as accountants or lawyers.

If a key person dies or suffers from a critical illness, your business will likely suffer financially.

As a business owner, you may know the essential importance of key person insurance. But what is this type of insurance, and why do you need it?

The term’ key person’ refers to a director or shareholder who plays an integral role in your business. They are often the top earners or cost-cutters for their organisation.

If they were to die or suffer from a critical illness and could not work for an extended period due to medical reasons, your company would likely suffer financially.

In many cases, this could mean that the company would go bankrupt due to a lack of capital or rising debt levels without these key employees – putting other employees out of work along with them.

Key Person Protection is essentially life assurance which pays out in the event of death. The sum assured will be paid to the business to help with the financial implications of losing an essential staff member.

Key Person Protection, otherwise known as Keyman insurance, is essentially life assurance which pays out in the event of death. The sum assured will be paid to the business to help with the financial implications of losing an essential staff member.

If a plan is taken out for two directors, then two separate programs are usually needed, each being assessed independently by the insurance provider and priced separately.

You must take out two individual plans if you have two directors. Each project is assessed separately by the insurance provider and priced independently.

If your business has two or more directors, they can get a discount if they simultaneously take out their keyman protection policies as the company policy.

A single premium plan is also an option; you only pay one upfront premium with this type of plan. As a result, your tip will be slightly higher than if you were paying monthly. Still, there are no further premiums to pay over the policy term, so it’s an option for those who prefer not to pay ongoing premiums over a longer time.

The Single Premium Plan is a good option if you only want to pay one premium and don’t want to make ongoing monthly premiums. However, there are some restrictions with this type of plan:

  • You can’t change your cover options once the policy has been placed. Therefore, if you need to make any changes, such as adding or removing additional keyholders, it will be a new policy and require another upfront premium payment.
  • If you cancel the policy early (before its expiry date), then there may be an early cancellation charge payable.

An indexed term plan means that your cover will rise in line with inflation, so you’ll always have enough body when you need it and don’t even have to think about it.

If you think about it, this makes sense. The cost of living goes up over time, so your cover needs to go up. That way, you don’t have to worry about your body being too low or paying more than you need to when you need it.

While that sounds like a great plan, there’s one problem: if your business is thriving now and can afford more than it did when it first bought its insurance policy, there’s no reason why it won’t be even more successful in the future and able to afford even more coverage then!

That’s where single premium plans fall – they only provide a fixed amount on which no adjustment can take place over time – leaving businesses exposed every time inflation rises above the level at which their policy was written (or whenever crime increases).

It’s essential to understand precisely what Keyman insurance is and how it can benefit your business.

Keyman insurance is a critical business continuity requirement. Without it, you could be vulnerable to financial loss if a key individual in your company dies or suffers from a critical illness. For example, if your company’s founder died, it would be difficult for you to find someone with the same knowledge and experience to step into their role. In addition, key individuals often have an extensive understanding of how their organisation works which may not be easily transferable to other employees or customers. If this happened in your organisation, how would you cope?

Keyman insurance covers death and disability, so if there were significant damage done by an accident at work, this could also be covered under the policy.

Bottom-Line

When it comes to protecting your business from the potential loss of a critical person, Keyman insurance is the most effective way. It provides the best financial protection for your company and helps ensure that you won’t have any problems if someone leaves unexpectedly or dies.

Who am I?

I am Dotun Adeoye, a Business Growth Strategist & Author of the 5 Pillars of Business Growth.

I’ve built up my experience via serial entrepreneurship, consulting leadership roles in business growth, business development and product innovation in large companies worldwide in the last 29 years.

Today, I consult with large businesses on how to sustainably grow their businesses, sustain infinite growth, ensure business continuity and achieve a legacy.

Hire Dotun Adeoye to Speak Virtually or In – Person at your company’s event to cover this or other topics. You can also get in touch via +44 203 097 1718 or dotun at dotunadeoye.com.

 

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