What is Keyman insurance?
It is life insurance availed by the firm on the life of the Key Person /Partner /Director of a Business.
The firm is the owner of the plan, it pays the premiums and is also the beneficiary of the policy.
This policy ensures business continuity by providing a cash lump-sum in the event of death, disability, or critical illness to the Key Person/Partner/Owner of the business.
A Keyman Insurance is also used to buy out the shares of the deceased partner, allowing the surviving partner(s) to continue the business.
Leading insurance companies like Zurich, MetLife, Friends Provident International Salama, & LIC International provide a wide range of Key Man Insurance plans in the UAE.
They also provide a wide range of riders like Critical Illness Benefit, Disability Cover, Dismemberment benefit as well.
‘Men and women, not machines, are the real source of profits in any business. Take away my factories, my plants, take away my railroad, my ships, my transportation, take away my money, strip me of all these, but leave me my men and women and in two or three years, I will have them all again.
Andrew Carnegie
Frequently Asked Questions
Is Keyman Insurance expensive?
Keyman Insurance is very affordable, typically the annual premium is much less than 1.00% of the cover amount. Depending on the age, lifestyle and health condition of the insured, it can be higher or lower as well.
What is the typical term of the cover of Keyman Insurance policy?
The term of the policy depends on various factors like the age of the key person/Partners and the personal choice of the stakeholders of the company.
It can be availed for a term between 5 years and the whole life of the insured.
What is the use of Keyman Insurance?
The Insurance proceeds are typically used for the following;
- Pay off the liabilities of the firm to banks, suppliers, and other debtors to ensure adequate liquidity in the business
- To buy out the shares of the deceased partner without affecting the business cash flows
- To mitigate the loss of revenue/profits due to the Death or Critical illness to a Key person or Partner.
How long does it take for payout in the event of a claim?
It usually takes 1 - 6 weeks working weeks after submission of the claims form and the relevant documents to process and payout a claim.