Request a Valuation
If you would like to request an up-to-date valuation of your policy, please click here.| Ask Tim: Keyman Cover |
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| Monday, 02 March 2009 | |
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He asks Tim if this is something he should have. Read on to find out what Tim has to say. A keyman policy – or a more politically correct term would be keyperson policy – should certainly feature in your business planning. Many business folk are busy ensuring the books balance and the bottom line increases without analysing the real risks to their business. This is not the market forces, currency fluctuations, personnel or similar risks but the very real risk you might be unable to be in business through sickness or death. We know the markets are bad at present but it could be a lot worse could it not? Just think about that for a moment. As risk managers, we look at this particular area for businesses and it is encouraging to hear that your other financial partners have brought this to your attention. Clearly, we are all experiencing very difficult times in the current financial climate but this pales into insignificance should you not arrive in the office tomorrow through contraction of a critical illness or indeed death. One’s perspective on life changes instantaneously when contracting a critical illness and the ramifications for the business, the employees and most importantly your family are huge. We cannot alleviate the trauma of this kind of life-changing event but you can plan to mitigate the financial impact. Just consider that one in three will contract cancer by the age of 60 and you are six times more likely to die in a road accident here than the UK. A keyman policy is there to pay a capital sum on death or should you contract a dread disease like cancer, heart attack, Alzheimer’s, stroke, MS, kidney failure to mention but a few ailments. In the circumstances of a critical illness, the monies can be used for paying for a replacement, convalescence, covering loans, meeting similar liabilities and paying bills perhaps. In the event of death, the monies can be used to do all the above and maybe create a cash sum to pass to the family in exchange for the shares of the company. The policy can be set up in various ways so that the company owns the policy to satisfy other shareholders interests or it can be for sole use. It can be placed in trust to avoid complications with local corporate rules, to ensure your wishes or to make it Sharia friendly. |
Simran runs his own business in Dubai for a number of years and recently his Bankers suggested he should have a Keyman policy. | < Prev | Next > |
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