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Guard The Key Man Of Your Business To Unlock the Bolts Of Victory

Posted on: Nov 19, 201 6

Business or a company is the name given to a group of people who sit down on a table with a plan to do something that benefits a customer and in turn help them in commercial terms.Now when it is a new business, this group of businessmen start their venture with the basics like understanding their business needs, understanding the demand of the customer, current market trend, hiring people, office set up etc… They concentrate more on what is immediate for the business like the above and overlook the others. But this negligence might deprive them of something very essential.

Customer is the king` is what every business believes and it is not them serving him but he is serving them by giving them an opportunity to satisfy his needs. This is the ultimatum when you play an important role in the market. But do you think, as a businessman, you can be successful with a poor office or company set-up? Is it not important to first satisfy your employee who in turn is going to put his heart and soul in satisfying the end customer? Yes, this is a very important factor which most of the businesses neglect and postpone them as unimportant.

The first thing that a business needs to do in terms of employee welfare is enabling them with a keyman insurance. A keyman insurance is nothing but a simple life insurance that is taken for the most important people of a business without which the business might faint and crumple down. This important position of keyman differs from one business set-up to the other. In a sole trader or small business team, it is generally the owner or founders who play this role and in a large business group, it is generally the board of directors and the owner who occupy this position.

How does keyman insurance work?

Before plunging into how this insurance works, it is very important to understand as to who all are the hot seaters on whom this has to be taken. This is a very crucial decision because it is going to involve people without whom the company might drown. Determining this important person is very important and this can be done by spotting the person who is irreplaceable. Like any other insurance policy, a company takes a Mykeymaninsurance policy on the key persons of the company and pays premium regularly. In case of sudden death of that key person, the pay-offs can be and will be claimed by the company.

Importance of keyman insurance

Why is it important for a company to go for a keyman insurance when it already takes a regular life insurance cover for all its employees? A regular life cover is for the employees of the company which gets paid to the employee`s family in case of any mishaps. This keyman insurance is nothing but an insurance cover for the company taken on the key person without whom the company might sink and die leading to bankruptcy and other major issues. In such cases, this insurance amount will be claimed by the other partners of the company which can be either used for the regular functioning of the business until it finds a suitable replacement or can be distributed to the shareholders, debtors helping in closing down the company amicably. This insurance would help in not only saving the company and its employees but also those who are dependent on it.

Benefits of keyman insurance

The first and foremost benefit of taking a keyman insurance is to safeguard the company from bankruptcy and to support the company during the recuperating period until it finds a suitable replacement for that position.The pay-offs from the company can be used for loan repayment which otherwise might become a big haunting burden.It helps the company in maintaining its shares at a stable price for they generally fall in value and importance after the death of the key person. But when the company is under this insurance cover, the investors will also have to hold to retain their shares with them.On top of all these, making an employee the key person for the company energizes his morale and he gets the feel of importance. This in many cases would help in retaining him for a long time. He is also boosted up to give his full dedication in the growth of the company.

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