Key Person Insurance
Most businesses are heavily reliant on certain key individuals within that organisation. If one person is prevented from working, either due to a serious illness or death, the impact on company resources and future profitability can be severe, even devastating.
XYZ Ltd is a wedding planning company with a renowned reputation for offering a complete service to meet their clients’ wedding needs. Alexandra designs their entire wedding dress collection and is famous for her designs and creativity.
After recent discussions, the shareholders have realised that their business relies heavily on the reputation of Alexandra’s design. If she were to become critically ill or die, their business would suffer and they could potentially lose a significant percentage of their profits. In addition, they will need to recruit and retrain a replacement, which could take at least three years.
With the advice of OCM Wealth Management Ltd, they decide to take out a Key Person Protection Plan, which would provide the funds to deal with these problems should anything happen to Alexandra.
This is a complex area of financial planning and there are many alternative plans that can be used providing different types of protection. Making a mistake in this area could mean the difference between a company failing or continuing to trade.