Keyman Insurance
Keyman insurance is defined as an insurance 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 benefit, in case of a claim, goes to the employer
Advantages
In case of 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 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.Keyman insurance is important, particularly for family businesses that are highly dependent upon a few individuals. It helps ensure that the business can absorb the financial strain of an early death and continue sustainably. The low cost and ease of securing a keyman insurance policy makes this very important business decision a simple one.