Key Person Insurance ClaimsHow to Make a Claim in the UK

You can make a key person insurance claim when the insured person:

• Dies during the policy term (life cover)
• Is diagnosed with a specified critical illness during the policy term (critical illness cover)
• Cannot work due to illness or injury for a specified period (income protection cover)

The exact circumstances covered depend on your specific policy terms. Critical illness policies list the conditions covered - these typically include cancer, heart attack, stroke, and other serious conditions, though definitions vary between insurers.

When making a key person insurance claim, you will typically need:

For Death Claims:

• Original or certified copy of the death certificate
• Policy documents (or policy number)
• Proof that the business is the policy owner
• Company registration documents
• Identification of the person authorised to act for the business

For Critical Illness Claims:

• Medical evidence from the treating consultant
• Diagnosis confirmation meeting the policy definition
• Policy documents
• Claim form completed by the policyholder (the business)

Timelines for key person insurance claims vary:

• Death claims - Typically straightforward. Once documents are received, most insurers pay within 5-10 working days
• Critical illness claims - May take longer as medical evidence needs to be assessed. Typically 2-6 weeks from submission of all evidence
• Contested claims - If there are complications (e.g., non-disclosure issues), claims can take several months

The most common cause of delays is incomplete documentation. Submitting all required evidence upfront speeds up the process significantly.

While the vast majority of key person insurance claims are paid, claims can be declined for:

• Non-disclosure - If relevant health information was not disclosed when the policy was taken out
• Exclusions - The cause of claim falls within a policy exclusion (e.g., suicide within the first year)
• Definition not met - For critical illness, the condition does not meet the exact policy definition
• Policy lapsed - Premiums were not maintained and the policy had lapsed before the event

According to the ABI (Association of British Insurers), UK insurers pay over 97% of life insurance claims. Ensuring full and honest disclosure at application is the best way to protect against claim issues.

To ensure your key person insurance claim goes smoothly:

1. Keep policy documents accessible - Ensure key people in the business know where the policy details are stored
2. Notify promptly - Contact the insurer as soon as possible after the event
3. Be thorough - Provide all requested documents in one go to avoid delays
4. Use your adviser - If you arranged the policy through an adviser, they can manage the claims process for you
5. Keep premiums up to date - A lapsed policy cannot pay out