Life Cover / Key Person Insurance

Life Cover / Key Person Insurance

What is it ?

Life insurance is a simple product designed to pay a lump sum if we die.

It can be taken out to provide cover to protect a mortgage. It can also be set up to provide additional family protection. In both these cases, the lump sum paid out provides financial help to our loved ones who would be left behind in the event of our death.

Life cover can also be taken to protect a business. If the owner of a business, or his / her partner or someone who is vital to the operation of a business ( a key person ) were to die, then the affect would normally be that the business would be severely weakened, financially and operationally. In this case the life insurance would provide some financial stability, at least initially, which would then allow the time for planning and re-organisation.

How does it work ?

You first choose just who should be covered, and for how much. You then apply for cover, and complete a medical questionnaire. You may be asked to attend your GP for a medical examination. The insurers underwrite your application and may then grant cover. If you insure for say £100,000, and subsequently die, then the insurer pays out a one-off, tax free, lump sum of £100,000.

In the case of mortgage protection or family protection, the lump sum is paid to your family. The life insurance policy can be written in trust to avoid the need for probate, and to ensure prompt payment.

For key person insurance (or key man insurance), the proceeds are normally paid to the business which insured the key person. The business may consist of individuals or a limited company.

Trust planning is not regulated by the FCA.

Take advice

It is vital that you get advice before taking out such a plan. As specialist insurance and protection advisers we know the market, we know the insurers and we know the products.

Price is of course a key factor here, which means that we would compare the prices offered by a range of insurers covering the whole market in order to deliver the best price to you.

We would also want to consider the financial strength of the insurance provider alongside the insurer’s medical underwriting criteria.

Knowing how a particular insurer might consider your past medical history can save both time during the application process and can also save money on the level of premiums. What looks to be a really good value premium at the ‘quote’ stage can often bear no resemblance to the premium charged after the underwriters examine your medical history, as they can add a weighting, which increases the price originally quoted.

Don’t be fooled. It is the price you pay which is important, not the price you are quoted originally.

Writing a policy subject to a trust can save money in probate costs, but can also speed up payments to a family which needs them following the loss of a loved one. We make no charge for our advice on the use of trusts.

For all insurance and protection policies our advice is paid for by the provider in the form of commission. You do not pay us. 

Don’t risk the future of your family or business, by relying on a salesman working in a distant location, who you will never meet and whose ethics and standards may be questionable.

We are happy to provide you with a free no-obligation quotation, so that you can evaluate cover and affordability.

Talk to us about who you want to protect. We will happily explain to you just how we would approach your requirements. Take advantage of our free, no obligation, life insurance and key person insurance consultation. We think you will like our straightforward approach.

Complete the form at the top right of this page for a call-back or e-mail and one of our independent insurance and protection advisers will make contact with you. Alternatively visit our contact page.

Alternatively, call us on 01482 863127