Key Man Insurance
for Business Owners

Keyman Insurance Policy

Keyman insurance policy is a type of life insurance that protects the company against financial losses brought on by the death or disability of its important people. Employers are responsible for paying premiums and receiving death benefits if an insured individual passes away within the policy's term. When a company feels that the loss of a key employee or member could significantly affect its functions, it purchases key person insurance where a predetermined amount is insured for the lives of "key" individuals, the insurance is proposed by the business organization, the policy benefits the business organization, and the premium is paid by the business firm.

Eligibility for Keyman Insurance

• Small Businesses and Start-ups

  Small businesses and start-ups in the UAE are eligible for key man life insurance to protect against the financial impact of losing a key individual whose skills, knowledge, or leadership are crucial to the success of a company. This policy helps ensure business continuity and provides funds to cover recruitment or training of a replacement.

• Growing/Mid-size Companies

  Growing or mid-size companies can benefit from a keyman insurance policy by safeguarding their business against the potential loss of key employees essential to their expansion and development. This coverage helps maintain stability, protects financial performance, and reassures stakeholders and investors about the company's risk management strategies.

• Established Organizations

  Established organizations in the UAE are eligible for key person insurance to protect against the loss of key executives or employees whose expertise and leadership drive the company's strategic goals and profitability. This insurance helps in managing succession planning, mitigating financial risks, and ensuring ongoing operations without significant disruption.

Documents Required for Keyman Insurance

• Information about the company
• Recent financial statements of the company
• Key person details
• Medical history and health assessment of the key person(s)
• Salary or compensation details of the key person(s)
• Business plan outlining the importance of the key person(s)
• Details of the company's ownership structure
• Copies of the key person's passport, visa, and Emirates ID
• Bank account details for premium payment and policy issuance

Inclusions in Keyman Insurance Policy

• Death benefit: provides a lump sum payment to the company in the event of the death of the insured key person(s).
• Critical illness benefit: offer coverage for critical illnesses that result in the insured key person(s) being unable to work.
• Permanent total disability benefit: Coverage for permanent total disability of the insured key person(s), providing financial assistance to the company.
• Temporary total disability benefit: provides income replacement to the company if the insured key person(s) is temporarily unable to work.
• Reimbursement of recruitment costs: coverage for the cost of recruiting and training a replacement for the insured key person(s).
• Loan protection: covers outstanding loans or debts guaranteed by the insured key person(s), ensuring the company is not burdened with financial obligations.
• Business interruption coverage: offer financial support to the company for the loss of profits or revenue resulting from the absence of the insured key person(s).
• Legal expenses coverage: covers legal expenses incurred by the company in defending against claims related to the insured key person(s) or their role in the company.

Benefits of Purchasing Keyman Insurance

• Sum assured

  Ensures adherence to UAE labor laws, avoiding legal penalties and fines.

• Financial protection

  The firm receives the sum assured if the insured person passes away, which enables it to manage the loss and carry on with business as usual.

• Financial help to the family The sum assured received by the business firms could also be used to support the deceased person's family.
• Tax benefits The premium that the company has paid is seen as an expense of the business. Consequently, there is a decrease in taxable profits, which lowers tax liability.
• Retention of people Employee morale is raised by the key person insurance because it makes them feel valuable to the company.
• Stability in the price of shares A key person insurance policy helps keep the price of a business organization's shares stable.
• Valuation of a business organization Key person insurance policy raises the business organization's valuation if it is being acquired.