Keyman insurance is meant to help a business recover from the loss of its valuable assets, or access to key customer demographics, viz the persons who manage it or possess the knowledge. Every business has a few valuable employees who contribute significantly to the running and growth of the company. They factor into the valuation of the business by investors and creditors.
Keyman insurance can be defined as an insurance policy where the proposer as well as the premium payer is the employer, the life to be insured is key employee, and the benefit, in event of a claim, goes to the employer. The object of keyman insurance is to cover the life of a keyman in case of untimely death, or any form of incapacity; or loss incurred by actions by the keyman. It is meant to mitigate the monetary impact of these events.
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