Key Man Disability Insurance
Key Man Disability Insurance (also called key person disability insurance) is a disability insurance plan that provides funds in the event of key persons disability.
What is a Key Person?A key person is an employee or key shareholder who has integral for the successful operation of a part of the business. The death or disability of this individual would seriously affect the company’s ability to earn a profit
What is Key Person Disability Insurance Keyman Disability Insurance is designed primarily for shareholder employees who would be entitled to an income from the business even if disabled. It is also offered to key, non shareholder, employees who the business depends on. Whomever the key person disability plan is set up for will have the benefit of insurance protection in the event of disability. They will receive income guaranteed by an insurer if disabled. This provides certainty for shareholders and improves security and therefore morale among key employees. Can’t the Company Just Guarantee the Salary?Yes. The company could just guarantee a salary in the event of disability. But what if there is an economic downturn that affects the business? And what if the disability is lifelong? That could amount to hundreds of thousands of dollars- possibly even millions. Summary of Benefits - An unknown liability is transferred to a budgetable expense
- Increased security for key people
- Automatic funding in the event of disability
- The plan is much cheaper than any uninsured plan
- The business can hire a replacement for the disabled key person while still paying that key person
Does your business have group disability insurance? Then set up a Supplemental Disability Insurance Key Man Disability Insurance plan for your key employee. Leave Key Man Disability Insurance and return to Disability Insurance Canada Find more information on Keyman Insurance
Note: Keep in mind that insurance licensing, legislation, and policies often vary by province and most certainly by country. Canada Insurance Source is a free information source. So use this site to gain a general understanding of insurance with your own area and situation in mind. This insurance information is general in nature and the policy wordings always take precedence. Make sure you review the "please read" page. |
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