+91 9810491710 support@netgain.in
+91 9810491710 support@netgain.in
Keyman insurance is characterized as a protection policy where the proposer, as well as the premium payer, is the employer, the life to be insured is that of the employee and the advantage, in case of a claim, goes to the employer. The `keyman’ or ‘key person’ would be any individual utilized by a company having an extraordinary skill set or significant responsibilities and who contributes essentially to the benefits of that organization.
The death of the employee can incur two types of losses to the company:
(a) Loss arising from profit reduction for the company
(b) Costs for the company in replacing the keyman
In case the company has keyman insurance, on the death of the employee, the sum assured is paid to the company. This sum assured is generally quite large and sufficient to not only tide over any business downturn, but also hire a new senior executive. If the insured person survives the term of the insurance then no money is paid to the company.
Be it a small business or a large company, keyman insurance provides quite a few advantages:
In case of the death of the employee, the company receives the sum assured to cope with the loss and also ensures business continuity without any hiccups.
The policy contributes to the company’s tax planning* - Premium allowed as a business expense under section 37(1) of Income Tax Act, 1961, subject to satisfaction of the assessing officer.
Options such as recruiting and training capable employee replacements, handling debt and liquidation of the company, or even successfully selling the company are all within reach when a business is covered by keyman insurance.
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+91 9810491710
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