Key person insurance calculator for business UK, by the insurers' rules
This key person insurance calculator for business sizes cover the way UK insurers publish it: a multiple of the key person's pay, a multiple of the profit they bring, or the loan the business would have to repay.
Type your figures to see each insurer's ceiling side by side, every one linked to its source.
It works as a key man insurance calculator too: key man and keyman insurance are other names for the same cover.
Every claim here is our summary of a named external source, linked beside it. Sources change: check the wording at the link before you rely on it.
Sources, to check at the link: (Legal & General ↗) (Royal London ↗) (Scottish Widows ↗)
Calculate your cover, three ways
Start with their pay.
Scottish Widows counts basic salary, regular bonuses, dividends and other regular taxable income (Scottish Widows ↗); Royal London uses gross salary including benefits in kind (Royal London ↗); Zurich uses the total remuneration package (Zurich ↗).
Add profit if you can attribute it.
Legal & General routinely averages the last two years' profits (Legal & General ↗), and Royal London averages over three (Royal London ↗).
Add a loan if the business would have to repay one if the person passed away (Legal & General ↗).
Switch between life and critical illness cover.
Each bar is one insurer's published ceiling for your figure.
Salary, regular bonuses and dividends; insurers word it differently
Their share of the business's net profit, averaged over recent years
Their share of gross profit
Business borrowing that would need repaying
£420,000 to £600,000
Across 4 published rules that apply to the figures you gave. Each is a ceiling, not a recommendation: the insurer's underwriter sets the real limit.
Add a net or gross profit figure above to see this method.
Add a loan figure above to see this method.
No premium is shown: the price depends on the person and needs an insurer's underwriting. Nothing you type is stored or sent.
How to calculate key person insurance, step by step
Every method takes one figure about the person and multiplies it.
The walk-through applies each insurer's own wording to your figures, one line at a time, so you can see where every number comes from.
Earnings. Up to 10 times earnings for life cover at Scottish Widows (Scottish Widows ↗), and up to 10 times gross salary including benefits in kind at Royal London (Royal London ↗). Profit. Legal & General lists up to 5 times attributable net profit (Legal & General ↗) and routinely averages the last two years (Legal & General ↗); Royal London's normal multiple is 5 times net profit (Royal London ↗), averaged over three years and attributed to the key person (Royal London ↗). Loan. The amount of a loan to be repaid if the key person passes away (Legal & General ↗).
The overall cap. Royal London caps total life cover for the business at the greater of 10 times the salary package or 5 times average net profit (Royal London ↗).
For critical illness, its cap is the greater of five times the salary package or five times the average net profit (Royal London ↗).
Profit here means the share of net profit you can attribute to this person. Nothing you type is stored or sent.
- Scottish Widows source ↗salary £60,000 + bonuses £10,000 + dividends £20,000£90,000
- Royal London source ↗gross salary £60,000 + benefits in kind £5,000£65,000
Each insurer words pay differently, so the same person has more than one pay figure.
- Legal & General source ↗up to 5 × average of 2 years, £165,000£825,000
- Royal London source ↗5 × average of 3 years, £150,000£750,000
Legal & General routinely averages two years; Royal London averages three.
- Legal & General source ↗the loan to be repaid if the key person passes away£100,000
The average net profit sets the cap on these figures.
£750,000
The greater of the two lines in step 5. A ceiling, not a recommendation or a quote: the underwriter sets the real limit.
What counts as remuneration for key man cover?
Scottish Widows: “The total remuneration figure should include basic salary, regular bonuses and/or dividends and any other regular taxable income.”
Where income varies, it says to use an average over the last two to three years (Scottish Widows ↗).
So for an owner-director paid largely in dividends, the dividends count there.
Royal London: “A multiple of gross salary including benefits in kind can give a useful guide to the amount needed to bring in a replacement.” (Royal London ↗) Its adviser guide describes the salary package as guaranteed earnings plus benefits (Royal London ↗).
Zurich says total remuneration package (Zurich ↗) and Legal & General says earnings (Legal & General ↗), without listing the parts in the guides we hold.
Ask the insurer, or your adviser, which parts it counts.
“Not named” and “not itemised” mean the source we hold does not mention the item, not that the insurer excludes it. Check each insurer's current wording at its link.
How we calculate cover, rule by rule
The calculator multiplies your figure by each insurer's published multiple, and nothing else.
There is no house formula and no rounding up.
A dash means the source we hold gives no figure for that cell.
Legal & General also lists a payroll formula: the key person's salary divided by total payroll, times gross profit, times a recovery period of at most five years (Legal & General ↗).
LV= lists profit, salary, loan, recruitment and start-up methods but publishes no multiples (LV= ↗).
Each cell summarises the insurer's own guide; check it at its link. Zurich's profit multiples may be pre-tax or post-tax depending on circumstances (Zurich ↗).
How many key people should you insure?
Royal London: “Some companies will have several key individuals, others only one.”
It adds that the size of a shareholding is not necessarily a good indicator of who is a key person, since a non-shareholding employee could easily be key to the business (Royal London ↗).
Each person is a case of their own.
Legal & General says the business needs the person's agreement and a financial relationship with them (Legal & General ↗), and must be able to show a loss of profits in their absence (Legal & General ↗).
Where there is more than one key person, Royal London says the profit may need to be split (Royal London ↗).
For a business loan, Scottish Widows allows full cover for up to 3 directors, owners or key persons (Scottish Widows ↗).
With four or more, it says cover should be split to protect the share of the liability each person is responsible for (Scottish Widows ↗).
Who
List the people the profits depend on
Shareholding is not the test: an employee with no shares can be the key person.
Consent
Ask each person
The business needs their agreement and a financial relationship with them.
Profit
Split the profit between them
Attribute each person’s share, so the same profit is not insured twice.
Loan
Share out any loan cover
Scottish Widows gives full loan cover for up to three people; with four or more, split it by each person’s share of the liability.
Calculate
Run the calculator once per person
Each person’s pay and attributable profit give their own ceiling.
Underwriting sets the final figure
The published multiples are where an insurer starts.
Scottish Widows sets key person cover at a maximum based on either remuneration or the loss of profits attributable to the person (Scottish Widows ↗).
Aviva asks for a full financial questionnaire above £2.5 million of life cover or £1 million of critical illness cover (Aviva ↗).
There are also hard maximums.
Legal & General gives £10 million for life cover only, subject to underwriting, and £3 million for critical illness under its Specific Work Task definition (Legal & General ↗).
Royal London gives £3 million for critical illness (Royal London ↗).
Size
Work out the ceiling
The calculator above applies each insurer’s published multiple to your figures.
Evidence
Show the numbers
Above set amounts, insurers ask for financial evidence to support the cover.
Underwriting
The insurer sets the cover
The underwriter decides the maximum from the person’s pay or the profit attributable to them.
Price
The premium comes last
It depends on the person and the policy, so only a quote gives it. The cost guide shows what decides it.
Key man insurance cost: what your cover figure means for the price
The calculator shows no premium, but the cover amount is one of the things that sets it.
Aviva: “The more coverage you need, the higher your premium will be.” (Aviva ↗) Drewberry, a broker, puts it more strongly: “the biggest influence on the cost of Key Person Insurance is first and foremost the size of your benefit” (Drewberry (broker) ↗).
No insurer we checked publishes a key person price, so we cannot give a key employee insurance cost for your figure.
The only published key person premium table we found is that broker's, for one set of assumptions (Drewberry (broker) ↗).
The cost guide explains what else sets the price.
Drewberry's published table, as printed: £150,000 of level cover, 10-year term, healthy non-smoking company director with office-based duties, quotes accurate as of August 2025. A broker's example, not an insurer's price and not a quote for you; check it at the link: (Drewberry (broker) ↗)
Next steps with your result: adviser, quotes, UK providers
The figure is the start of a conversation, not a policy.
Whoever sells you key person cover must first specify your demands and needs from what you tell them (FCA ↗) (FCA ↗), and Legal & General, for one, has its own advisers for Key Person Protection (Legal & General ↗).
The cards set out what to do next.
Take the figure to a quote
A price comes only from an insurer's underwriting. Our quote page shows what a keyman insurance quote turns on.
Keyman insurance quotes →See how insurers describe their cover
Maximum cover, ages and cover types, each from the insurer's own documents.
Compare UK providers →Know what sets the premium
Age, health, cover type, term and the cover amount you have just worked out.
Key person insurance cost →Have the numbers ready
Royal London lists proof of income (a P60 or equivalent) and audited accounts covering the last two years, as indicative requirements (Royal London ↗).
How underwriting works ↑Check the firm first
The FCA tells consumers to use its Firm Checker before buying insurance (FCA ↗).
FCA Firm Checker ↗Check it for yourself
Every claim on this page is our summary of one of the documents listed here.
We last checked them against the live sources on 28 September 2026.
The documents are the authority, not this page.
Insurers and HMRC update them, so validate any figure or condition at its link before you rely on it.
- Legal & General adviser guide ↗Earnings, profit, payroll and loan methods
- Legal & General key person insurance ↗Agreement, a financial relationship and a loss of profits; its own advisers
- Royal London technical guidance ↗Salary including benefits in kind, profit multiples, several key people
- Royal London business protection guide ↗The overall caps on life and critical illness cover, and the evidence it lists
- Scottish Widows key person calculator ↗Their published earnings multiples
- Scottish Widows underwriting FAQs ↗What counts as remuneration, loan cover across directors, how cover is capped
- Zurich intermediary guide ↗Key person protection (November 2021 guide)
- LV= adviser site ↗Lists the sizing methods without multiples
- Aviva business protection ↗Financial evidence above set cover amounts
- Aviva: how life insurance premiums are calculated ↗More cover, higher premium
- Drewberry (broker): keyman insurance cost ↗A broker’s key person premium table, August 2025. Not an insurer
- FCA Handbook, ICOBS 5.2 ↗The demands and needs test before an insurance sale
- FCA Firm Checker ↗Check a broker or adviser is authorised before you buy
Key person insurance calculator, FAQs
Not financial advice. This page is general information. Before buying insurance, the FCA tells consumers to check the firm on its Firm Checker (FCA ↗). For free guidance, see MoneyHelper.