Key Person Life Insurance UKProtect Your Business

Key person life insurance is a policy taken out by a business on the life of an essential employee, director, or owner. If that key person dies, the policy pays a lump sum to the business to cover financial losses, recruit a replacement, or repay debts.

Calculate key person life insurance cover based on: profit contribution (2-5x annual), recruitment costs (6-24 months salary), debts secured against them, and client relationships at risk. Most UK businesses insure key people for £100,000-£1,000,000.

Key person life insurance premiums may be tax deductible if the policy is solely for business benefit, covers loss of profits (not loans), and the key person is an employee. The payout is typically taxable as trading income. Always consult a tax advisor.

Key person life insurance is essential for businesses that rely on specific individuals - founders, directors, top salespeople, or employees with unique skills. SMEs, startups, and family businesses are particularly vulnerable to losing key people.