What is Keyman Benefits Planning?
Keyman Benefits Planning is when the employer takes on insurance coverage for his or her company’s key employees. When a claim is made, the sum assured goes to the employer and the employer can then decide the amount of pay-out that goes to the employee’s family.
The Keyman here can be any employee, who contributes notably to the profits of that organization.
In a Small – Medium Enterprise, this is usually the owner, the founders or perhaps a key employee or two. These are the people who are crucial to a business, the one whose absence would sink the company.
Even in the case of a Multi – National Corporation, according to Pareto Principle, there are 20% of employees who bring in 80% of the revenue and these are the key employees whom you will need to ensure that they are well taken care of to prevent a financial catastrophe to the company.
Unlike Keyman Insurance which is just purely in the event of the demise of the key employee, Keyman Benefits Planning could take place in the form of life benefits like retirement planning and even critical illness planning.
Why Keyman Benefits Planning?
- Shows employees that you are invested in their health & future
- Assists you in attracting and retaining talent
- Differentiate your business from competitors
So, what’s the Abundant Life Planner’s approach to Keyman Benefits Planning?
Using our 100 unique questions on the vulnerabilities on the company, we find out what’s important to you as the business owner and what keeps you awake at night. What’s important for you, your family and your business may not be the same for another person nor another business.
From there, we build a bespoke and customised Financial Home tailored to your company specifically.
What happens if a Keyman quits the company to join another?
The first employer, who has bought the Keyman policy, can choose any one of the following options.
- The first company (employer) can stop paying the premiums and allow the policy to lapse.
- It may continue paying the premiums and collect the proceeds on a claim arising.
- The policy could be transferred to the new employer of the Keyman on terms mutually agreed upon by both the companies.
- It can be assigned in favour of the life assured / keyman.