This is a very good question and one that needs a lot of consideration. Key person insurance is designed to provide the business with a lump sum payment should the insured life suffer one of a defined list of critical illnesses(optional) or pass away. The aim of the cash benefit is to keep the business on the straight and narrow during these difficult times.
The value you place on losing a key person should reflect the loss in profits to the business. For instance the key person cover might equal the amount of profit typically generated by a sales director. Additional costs that may well occur can also be included such as the costs associated with finding, hiring and training another individual to the same standard.
For any organisation considering business protection it is important to ensure any provisions made are adequate. We have a range of calculators which we can work though with you to help you choose a suitable level of cover for your key members of staff.
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 020 8432 7333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.