Shareholder / Key Man

Amid the busy, complex business of running a company, little attention is paid to what may happen if a shareholder died, or becomes seriously sick.

In the interests of finance and business stability, particularly for private limited companies – it is essential to provide a net in the event of the loss of a shareholder:

Such protection allows for enough funds to be available in the event of a premature death or serious illness of a shareholder to enable the company to continue to operate while the leaving shareholder or their family receive a fair purchase price.

Keyman is much the same as mortgage protection or a normal term life policy taken out to cover a loan. The difference is the beneficiary in the case of keyman insurance, instead of being the spouse its the company. The policy is taken out to protect the business against the financial problems of losing a valuable employee due to ill health or death.


Large businesses may well already have these protection policies in place. But small to medium size companies tend to miss out on this insurance or do not even know it exists. Businesses always insure their important equipment.

But for some reason do not think to insure, “the employees” until of course its too late. Also have a look at shareholder protection insurance to enable the remaining shareholders to purchase back the shares in the event of a shareholders death.