Financial protection for your client’s business if a key individual dies or suffers a critical illness


What is Key Person Protection?

Key Person Protection helps protect a business against the financial fallout of a ‘key person’ dying or falling terminally or critically* ill during the term of the plan.

Whether they provide expertise, contacts or other assets, losing a key person can be very damaging. The business could be hit by a loss of profit, reduced sales, recruitment/training costs and disruption to their plans, to name but a few potential problems.

*If the business takes out critical illness cover, which is an optional extra.


How do you identify a ‘key person’?

In almost any business, there’ll be a few people who make a major contribution to the company’s profitability. People whose skills, experience or expertise would make them difficult to replace. Often, their value will be reflected in their remuneration package: a good indicator if you’re helping a client identify the key people in their business.

Examples of key people include:

•    managing directors
•    technology specialists
•    sales managers

•    other individuals with specialist skills


How does the protection work?

With Key Person Protection, your client takes out a life insurance policy (with or without optional critical illness cover) written on the life of the key person. The policy is owned by the business, which also pays the premiums. Any payout is therefore paid to the business, which could use the money to, for example, recruit or train a replacement.

Key Person Protection is available in the form of term assurance. 


For further information, please see the Key Features (pdf) document.


Here are some of the facts you need to know about our Term Assurance plan which can be used for Key Person Protection.

Criteria Min/Max Details  Notes
Age Limits Min Age 16 The ages shown are for the life to be insured who may be different from the policy holder.
Plans can be taken out individually or jointly but the cash sum is payable on the first claim only.
Max Age 89
Term Min term 1 year
6 years if critical illness option with reviewable premiums is selected
 
Max Term 50 years 50 years for Life Cover only
50 years if Reviewable Critical Illness is chosen
40 years if Guaranteed Critical Illness is chosen
 
Payment
  Limits		 Min premium £5 per month

Or £50 annually.

Monthly premiums must be paid by direct debit. Annual premiums can be paid by cheque or direct debit.
Maximum Cover None (life cover only) NA

 

Maximum cover is £2,000,000 with Critical Illness option.

 

Critical Illness Option Min Age 16

The ages shown are for the life to be insured who may be different from the policy holder. If your client chooses guaranteed premiums, the plan must end before the client’s 76th birthday. The maximum term of the plan is 40 years.


If your client chooses reviewable premiums, the plan must end before the client’s 91st birthday. The maximum term of the plan is 50 years.

 

 

Max Age 59
Max Cover £2,000,000 This includes any other critical illness cover that your client may already have with Aviva and/or any other provider.
If the cash sum is paid upon diagnosis of a critical illness, no further benefit is payable on diagnosis of a terminal illness or on death.
Critical illness cover pays out a lump sum if your client is diagnosed with a critical illness that meets our plan definition and then survives for at least 14 days. We only cover the critical illnesses we define in our plan and no others. The life insured's children are automatically covered under the children’s critical illness benefit.
 


Charges


There are no additional charges for clients to pay. All charges for our Term Assurance plan are included within a client’s premiums.


For further details on our charges, view our key features of term assurance (pdf).


Here is some information to help you decide if our Term Assurance plan - which can be used for Key Person Protection - is right for your client.

 Designed for customers who  Not designed for customers who
  • Want to protect against the financial consequences of the death of a key person for a defined term
  • Have creditors
  • Want cover for a specified term 

 
  • Want an investment-linked arrangement
  • Want protection for the whole of a key person's life
  • Want a cash-in value
  • Want a life insurance amount that decreases over the term of the plan
 Key considerations  Possible alternatives
  • Level of cover required
  • Existing levels of cover
  • State of health
  • Financial liability assessment
  • Succession planning if business protection 

 
  • Self-insurance (existing assets)
  • Whole of Life plan


We've got all the support you need

Whether you’re trying to identify potential business protection clients or you’re already selling it, you can get all the tools and support you’ll need here.


Prospecting Letters

Use our prospecting letters to help with that first step towards selling business protection products.

 
Trusts

Business protection policies can also be placed in trust, which could help to ensure any claim proceeds go to the right people as soon as possible. For more information view Your guide to protection trusts (pdf)

Case studies

Key Person Protection, Share Protection or Business Loan Protection? View our client guide (pdf) for case studies showing how different protection solutions suit different clients and how they make their decisions.
 
Contact us

We have a wide range of support staff available to help you, view our contact details to find the right number that meets your needs.
Or call our Business protection support team on: 0845 900 0818.
WA02177 07/2011

Related documents

For Adviser use only. This information has not been approved for use with customers.

Aviva Life Services UK Limited.
Registered in England No 2403746. 2 Rougier Street, York, YO90 1UU.
Aviva Life Services UK Limited is authorised and regulated by the Financial Services Authority. FSA Registration No 145452
www.aviva.co.uk