|Posted by deon.keyman on March 6, 2013 at 3:25 AM||comments (44)|
One of the biggest risks in small business is the fact that a company’s operations generally revolve around one or two key people, without whom the business cannot continue. Key person insurance is simply life insurance on those key people.
As a business owner you no doubt value the contributions each of your employees make to your business. However, there are also key individuals who are critical to the continued success of your venture. Losing such a key individual would impact you on a personal as well as business level.
A key person is anyone who significantly improves the profitability and effective management of your business. He or she is someone who:
Should one of your key people die or become disabled, the impact on your business can be devastating:
This payout helps to:
For insurance purposes, however, the amount of key person cover is usually determined using one of the following methods:
The loss of a co-owner to death or disability could impact your business in the following ways:
The co-owners enter into an agreement where they undertake to purchase the interest of their fellow co-owners should any of them die or become disabled.
A co-owner effects an insurance benefit on the life of another co-owner and vice-versa. Each co-owner will consequently own a benefit on the life of the other and pay the premiums under the benefit of which they are owner.
The insurance payout provides the cash to facilitate the purchase of an interest in the business, thus ensuring business continuity and the financial welfare of the deceased’s dependants.
more than one co-owner is involved, the benefit on the life of each
co-owner will be jointly owned by the other co-owners, proportionate to
their interest in the business.
|Posted by deon.keyman on March 6, 2013 at 3:25 AM||comments (0)|
How much money are you willing to pay more because the agent you did your business insurance (key man, key person insurance) with is your best friend . So you are afraid to get quotes with someone else so your relationship with him can stay intact?
This is a strange question, because not so long ago insurance was a intimacy-only business, it was just about being intimate with your client, in other words being your friend and getting you to trust him 100%.
Once the client bought an insurance product, the product built up a cash value, which meant the product (insurance policy) became valuable in its own right, and so the competition for who can get you the best and cheapest life cover stopped the moment you bought the insurance.
This has changed completely - no cash value is built up over time, and what you pay for life cover changes every year as you get older.
In my opinion this is a big improvement, as the client is now first!
Now the focus has changed to your health, and it is how healthy are you compared to other people that is the same age as you? Has your health improved or gotten worse since you took out the life cover policy all that time ago?
Well if it got worse - then you have the best deal - as the one advantage of securing life cover is that the insurance company may not change what it charges you for life cover if your health deteriorates. So now you have really cheap life cover f- or your specific health, and so you should guard your current insurance policy with your life. Excuse the pun.
But if your health has improved, then you are paying too much for the life cover compared to your specific health position. Which means it is time to get new quotes and save yourself some money.
When you got the cover you would have fallen into one of two groups
Perfect health and no dangerous sports or job or excessive driving.Not perfect health with dangerous sports or job or being a smoker.
Has any of these changed for the better since then:
you are healthier for your age group no dangerous sportsstopped driving so muchstopped smokinglost wait - started gymwent on new medicine, so now are healthierstopped divingstopped parachuting or parasailing
You will know if they loaded the premium as you would have had to sign for the extra premiums.
As getting quotes are free, only a bit of a nuisance at worst - most of the time a free medical is included, which has turned out for many as a life saver, as they identified a illness early that has saved more than one life. So you can only win there is no down side!
Life cover has changed to be very competitive, and the process is now more like short term insurance (cars and household insurance) your broker should get new updated insurance quotes with different insurance companies on a regular basis so that you the client can always have the best deal that you possibly can.
So if your friend is a agent for a specific Insurance company - they don't shop around for the best deal (they are not allowed), they give you what they have “the best” which is always the company they are at - makes you wonder...
So in conclusion don't let your friendly insurance agent stand between you and the cheaper life cover that you could have - let a insurance broker quote for free for you today, and start saving money! If he is really your best friend he will understand.
|Posted by deon.keyman on December 19, 2012 at 2:55 PM||comments (0)|
Key person disability insurance is the key to the proprietors ongoing financial success , as it insures that you will get compensated even if there is a serious disease , like your partner ( key man ) disability , if he gets disabled , or have a heart attack etc .
The dilemma with all new organisations is that you do a great deal of work first , for which you will get remunerated later when the business is successful - this is where the risk lies ! This is why you ought to get key person disability insurance to cover you in this daunting situation , in a lot of the cases this will make the difference between your business's survival or insolvency .
As the owner when you are attempting to spot the key person , most of the time it will be obvious but if you really can't recognize him - then you are the key person !
The first step in being able to attain key person disability insurance is a great business plan , yes the same one you will need for the bank for financing etc . As this will determine the potential value of the key person , and the business .
One of the building blocks to be able to get key person disability insurance is that you must be able to prove a loss on your side if your key person should become disabled .
Situations where key person disability insurance should be considered is :
Then preferably you want a lawyer insurance broker combination to help you put all of the key person disability insurance in place , as in a significant of cases there are business contracts that must be put in place and most of the time it is not at all that evident what to do . One contract neglected can have a detrimental effect later !
So as you can see key person disability insurance is an essential part in managing your businesses risks , and sometimes your own risks in the process , if you have any questions don't hesitate to call , or follow this link to my website : http://sandtonkeymaninsurance.webs.com