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What is Key Personal Insurance

>> May 5, 2013

Key personal insurance is the insurance policy which is taken by employer for covering the loss of highly skilled and experience employees. We know that we can not cover the loss of the life of anybody but for business we can count the monetary value of any human resource due to his duty.

 There are some employees which contribute for generating big profit for company. For example, an experienced marketing manager may have power to sell mud as Gold due to his advance selling skills. Company is earning millions of dollars due to his good selling ideas. So, this marketing manager will be his key person. Lots of other competitors wants to buy his marketing manager, if he is honest, they want to close his life story at any way. If he dies uncertainly due to any conspiracy, company will cover the loss which happens due to his death. The premium of key personal insurance policy is decided on the basis of estimation of loss of profit of business.

Following are its main features :-

1. This policy can be taken for covering the loss due to death or disability of key persons of company.

2.This policy is taken for duty life of an employee.

3. This insurance policy is taken by small premium and at any time, it can be surrendered.

4. This insurance policy is not only for employee but if any company feels to cover the loss of profit due to the loss of life of his business partner or associates, company can take insurance policy for these key persons.

5. Company can get benefit of replacing new employees or key person from this policy.

Categories : Accounting Dictionary  | Insurance Terms | Finance 

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