Keyman / Individual Insurance:

Keyman insurance is often taken out by businesses to compensate the business for financial losses that may arise through death or incapacity of an important member of the business.
Small and medium sized businesses are often reliant on one or two key partners. Their knowledge, experience and strategic importance will be lost through death or disability and costs may be incurred to replace and train a new member.
There are tax implications considerations and estate duty may also apply it is important to choose the correct structures.

These options may be confusing

In fact, the smartest thing you can do is - Get a specialist broker to do it for you!

 

Also note the following guidelines and considerations:

Keyman insurance policies may also offer

  • Where individuals signed surety on credit facilities it may impact the estate if the finance house call up the facility. Keyman insurance may be a sensible option to cover this type of liability.
  • The Keyman insurance premiums is normally tax deductible if it is being bought to cover an expense. Upon paying out after the death the pay out will also be taxable.
  • Keyman insurance may also be bought as a vehicle to buy the shares of a shareholder.
  • Certain Keyman insurance policies allows for certain cover extensions on top of normal benefits. For example a salary benefit may become payable to family members for a predetermined period in the event of the death of the employee.
  • Pending how the Keyman insurance is structured by your advisor an allowance may be deducted from income for premiums paid. But there are certain requirements.
  • Premiums paid by the company can be deducted and may also form part of the remuneration of the person. 
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