Key-man Insurance: security and financial independence
Key-man insurance security (and potentially, financial independence) is provided for your dependants at a time of their greatest need.
Business survival following the death/ disablement of a key person…
Whether you are self-employed under a company structure or dependant on a key person for technical or other skills you should address the consequences of that person’s untimely death or permanent disablement – for the benefit of your family’s financial security and for the other employees and stakeholders in the business. As you are aware accident and/ or serious illness can change the future of our lives in a matter of moments.
Consider the following Case Study – and whether your insurance portfolio is adequate to protect your family and your business partners if you or others are effected by such an event.
When a client tragically lost his life before the birth of his second child and the fledgling business he had operated had some serious debts to pay, it was a relief to be able to go to his family and reassure them that the insurance protection that we had recommended – and that he had taken up – would at least minimise their financial grief.
Having determined that the company debts, the home mortgage and some capital on which to base some investment income would constitute the appropriate level of cover, it was a satisfying experience to take the claim settlement to the family and see the relief on their faces to know that they could clear all debt and still have a source of income to supplement their ongoing living costs (including raising two very young children).
In this case we had taken the policy as a Key-Man policy under the company structure, providing protection in the event of loss of capacity (Total and Permanent Disablement), or loss of life (Term Life). Whilst the family may take a long time to recover from the loss of a loved one, the financial certainty provided through this cover has meant that they can deal with the grief without financial distractions.
How much does key-man insurance cost?
For an investment that has an annual cost less than the superannuation guarantee amount being set aside for most Australian workers, most families and/ or small businesses could be well protected similarly to our featured client. The factors that affect cost include age at time of approval of policy protection, associated health issues, the amount of cover, occupation, smoker-status – and features that are relevant to individual circumstances: to determine the cost to you for the protection most relevant to your needs, see below for our contact details.
How can key-man insurance be arranged for you?
A meeting with one of the Continuum Financial Planners Pty Ltd experienced advisers will see that your personal circumstances are reviewed with you so as to determine your need for the protection available: we will listen to your circumstances, confirm our understanding of your financial position – and needs; and assess those matters so as to provide recommendations as solutions to your financial protection needs, whether they include risks you can afford to retain; or prefer to refer them to an insurer.
For personalised, professional wealth management advice, call our office (on 07-34213456); or Contact us through our website for an obligation free appointment with one of our experienced risk insurance writers to ensure your family and any business partners have the peace of mind that goes with financial security.
(This article was originally published in June 2012: it has been refreshed and updated for republication in September 2014.)