Key Person Insurance

It used to be called key man insurance, but happily we now live in (slightly) more egalitarian times. What can key person insurance do for you and your business?

In this article:

What is key person insurance?
How does key person insurance work?
What are the benefits of key person insurance?
Is key person insurance tax deductible in the UK?

What is key person insurance?

Key person insurance is a type of life insurance policy that is taken out on a key person in a business, such as a CEO, partner, or key employee.

Learn how it compares to regular life insurance.

How does key person insurance work?

With key person insurance, the death benefit is paid to the company, which can use it to cover the costs associated with the employee's death, such as recruiting and training a replacement.

What are the benefits of key person insurance?

Key person insurance is a type of life insurance that is often used by businesses to protect themselves financially in the event of the death of a key employee. The insurance pays out a lump sum to the business, which can then be used to cover the costs of finding and training a replacement, as well as any lost profits. In the UK, key person insurance is tax deductible, which means that businesses can claim back some of the premiums paid on the policy. This can be a valuable way to reduce the cost of the insurance and make it more affordable for businesses.

Is key person insurance tax deductible in the UK?

Yes, key person insurance is tax deductible in the UK. The tax treatment of key person insurance depends on the type of policy, but most policies are taxed as income.

Read more about the tax treatment of key person insurance and whether you should hold it in a trust.