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Who can be a Keyman?
Anyone with specific abilities, whose loss could put a strain on the business’s finances, qualifies for Keyman Insurance. For instance, they could be company directors, key sales representatives, key project managers, individuals with specialized expertise, etc.
How can keyman insurance be used?
In essence, it is a pure term plan that a business can purchase to cover the life of a key employee. But the policy has lots of applications. The money that can be recovered from such insurance enables you to fund executive compensation plans, acquire and settle loans, hire and train key staff, and make salary continuation arrangements for the deceased person’s spouse.
What are the advantages of keyman insurance?
Keyman insurance offers many benefits, whether the firm is small or large. The company receives the amount guaranteed in the event of an employee’s passing, ensuring both loss mitigation and uninterrupted operations.
The policy helps the business plan its taxes* – Premiums are permitted as business expenses under Section 37(1) of the Income Tax Act of 1961, provided the assessing officer is satisfied.
When a business is protected by keyman insurance, options including finding and training competent employee replacements, managing debt and company dissolution, or even successfully selling the company, are all possibilities.
Keyman insurance is crucial, especially for family businesses that depend heavily on a small number of people. It ensures that the company can sustainably endure the financial impact of early death. This extremely significant business choice is made simple by the affordability and simplicity of obtaining a keyman insurance policy.
To learn more about Keyman Insurance, please get in touch with us.