5 min read
Updated on Dec 16, 2022
Keyman insurance is an important form of business insurance where protection is offered by employers to key employees to safeguard them from unforeseen events. Let us get details of keyman meaning.
Insurance plans safeguard individuals or families from sudden events like accidents, illness, death etc. There are various types of insurances with varying features that offer coverage to individuals and groups to secure them against financial crunches. However, it is important to understand such plans before purchasing them because there are many minute details which are involved and which you should know.
Like individual and family insurance policies, plans are also available for businesses and groups to cover employees and their needs. As such, no organization can thrive without their employees. And so, it becomes the responsibility of the organization to protect them from unforeseen events. There are many insurance plans that allow employers or businesses to cover their employees under the right plan against untimely deaths or unfortunate incidents. All they need is to research well and buy the best plan to suit the requirements of the organization and their employees. One such type of insurance is the keyman insurance plan, which we are discussing in this blog.
A keyman insurance is a plan that is purchased by the employer of a company or business for their employees. In this case, the proposer and the premium payer of the policy is the employer and the insured person is the employee. So, a key man policy is ideally meant for an organization who want to secure the lives of their employees against the risk of unexpected incidents, accidents or death. Under this plan, the employer proposes the policy as well as pays the premium to secure their employees from risks. Hence, the life insured under these plans are the employees, while the benefit of claims goes to the employer. So, in case there is a death of an employee that takes place during the tenure of the policy, the death benefit will go to the employer. The employer, on its part, compensates the family of the employee so that they can manage their burdens accordingly.
However, it is necessary for employers to know keyman insurance meaning and the terms and conditions of such plans well before investing their money.
Below are some benefits of the keyman insurance plans:
Below are the requirements needed at the time of buying keyman insurance:
To calculate the premium of a key man insurance plan, employers can use a keyman insurance premium calculator online. Calculating the amount will help employers to choose the right policy and take the right decision at the time of investing money under such plans. To calculate premium amounts with high accuracy, the employer is required to enter proper details, which is used by the calculator to calculate the value.
Now you know the keyman insurance policy meaning and you also know that it serves multiple purposes to a company. But, it is important to consider everything before buying a keyman insurance online to save time and money for the employer. Further, this will help you to know which of the losses are covered under keyman insurance by means of comparison.
However, the employer should understand the purpose of buying the keyman insurance before investing the amount. Further, they should be well versed with the terms and conditions of the policy as different insurers might have different terms of the policy. Thus, the employer should assess and compare the various available plans online.
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