Keyman

Keyman Insurance scheme

Loss may be grouped into two broad categories - Reduction in profits and Cost of replacement.
The purpose of Keyman Insurance is to protect a business firm against the reduction in profits resulting from the death of a valuable and important person to the business entity.

Advantages:

1. Employees and vendors will have confidence
2. It will aid in finding a replacement for the key person
3. Business will not be affected financially in case the key person dies
4. Banks will be confident of continuing to conduct their business with your company

Definition of Keyman:

1. Any other legal entity as the employer and its employees
2. A corporate as the entity where the 'life to be insured' is a key employee/director of the corporate
3. A sole proprietorship as the entity where the 'life to be insured' (other than the sole proprietor) is any employee of the sole proprietorship