Key person insurance is essentially life, trauma and TPD insurance policies taken out by a business on the life of a key person.

A key person can be anyone directly associated with the business whose loss can cause financial strain to the business. For example a director of the company, a partner, a key sales person, or someone with specific skills or knowledge which is especially valuable to the company. The proceeds are the used in the business succession plan, in the event of a partner’s death, or to offset the costs such as hiring temporary help, recruiting a successor and losses to business profits.