A General definition of insurance is “an agreement through which company compensate for any kind of loss for example damage, illness, Death etc." This is a kind of security which is provided by the company to their employees so that they get security in their job. We can also call it a type of extra benefit which an employee gets. Apart from the employees the key person of the company also gets a Key Person Insurance for itself which benefits the company in future. WHAT IS A KEY PERSON INSURANCE The owner of the company is known as the key person. In small companies, it may be one but when we talk about the corporate world many big companies have shares of a group of members. In either case, the key person gets insurance policy if an accidental or unexpected death of that member happens company gets the insurance payoff. HOW TO AVAIL IT? For this insurance policy, the company has to purchase life insurance for its key employees and it also has to pay the premium. In case of death of the key man of the company, the company receives insurance payoff. The funds received can be used for the expenses. Until or unless a new key person was found or appointed for that company. WHICH TYPE OF EXPENSES WERE INCLUDED
BENEFITS TO THE COMPANY: If the key man of the company is alive but unable to work due to any major reason the payoff will be attained by the company. It also protects the business from the risk after the unfortunate death of the key man. When the company is paying premium then it will save 30% surcharge on one rupee of premium paid and this all will be according to the current tax law. When the key man of the company get these types of benefits then the moral of the key person boost up and hence productivity will increase. Last but not least, if in any unfortunate case the company has to be auctioned then the potential buyer will put a higher value if the company has the back up of insurance to meet the money replacement of the key person. NOTE: This insurance may not be issued to the company whose profit is declining apart from any special circumstances. The renewal time, the premium paid and the age limit will be different from one insurance company to the other. All-time loss-making business companies were not allowed to buy this Key Person Insurance. OUR SUGGESTIONS:
0 Comments
Leave a Reply. |
AuthorLife Insurance Policy sales professional. ArchivesCategories |