How do I value a key employee for key person insurance cover?

Frequently Asked Questions

verisign seal
or call us on 0208 432 7333
 
Drewberry Insurance services are rated 4.9 / 5 based on 137 client reviews
Our Insurers - Aviva, LV, Friends Life, PruProtect, Ageas Bright Grey, Scottish Provident, Legal & General, Exeter Family Friendly

How do I value a key employee for key person insurance cover?

+7 votes
We are a small firm considering keyman insurance as there are 4 or so key members of the team we would really struggle without. How would we go about placing a monetary value on these individuals?
asked 3 years ago by sonia63 (230 points)
Compare Top 10 UK
 Business
Insurers
Need help? 
Call us on 
-
Our in-house Experts are here to provide
FREE impartial advice!
Type of Cover
Company Name
 
No. of Employees
 
verisign seal
verisign seal
1 Answer
+2 votes
 
Best Answer

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.
answered 3 years ago by Andrew Jenkinson    (4,950 points)
edited 3 years ago by Andrew Jenkinson
Compare Top 10 UK Business Insurers
Need help? 
Call us on 
 -
 Our in-house Experts are here to provide
 FREE impartial advice!
Sunday TimesFinancial TimesDaily Mail
Related questions
Our Principles
1. You Come First
We are a client focused business who always aim to put you first.
2. We are Experts
To provide you with the best advice, we need to know our stuff!
3. We are Human
We are real people with feelings who are here to help you.
4. We are truly Independent
We believe the best advice has to be completely unbiased.
5. We are here to Educate
We are here to educate you so you can make informed decisions.
Contact Us

We would love to hear from you, whether you are enquiring about our services, a career, or a business partnership.

Email us at help@drewberry.co.uk

London Head Office
Corporate & Wealth Advice

020 8432 7333

Brighton Office
Protection Advice

01273 646 484

Leicester Office
Health Advice

020 8432 7333


© Copyright 2015  |  All Rights Reserved
Published by Andrew Jenkinson
Financial Services Authority
Powered by Q2A