KEYMAN INSURANCE

WHO IS A KEYMAN?

• A person whose services significantly affect the profitability of the company.
• A Key Person could be an employee or director with technical expertise, experience, entrepreneurial vision, or market reputation whose loss would impact the company's profitability.
• There can be multiple Key Persons within a company who have the required background, knowledge, and experience.
• It is not necessary for a Key Person to hold the highest position.
• A Keyman cannot be the sole proprietor of a firm.

Purpose

The purpose of Keyman Insurance is to protect the company from possible financial losses it might suffer due to the death of the Keyman.

Examples of Keyman

• CEO
• Managing Director
• Director
• Top Executives at strategic levels like Executive Directors, General Managers, etc.

Financial Eligibility

• 3 times the average Gross Profit of the company for the last 3 years.
• 5 times the average Net Profit of the company for the last 3 years.
• 10 times the annual compensation of the Keyman (including salary, bonus, and other perquisites), whichever is LESS.

Products Offered

Only Pure Term Plans are allowed. No riders shall be permitted.

Proposal Form

• The Proposal Form should be filled by the Keyman in the Life Assured section.
• The Proposer’s details must be completed by the Employer (Company).
• The Proposal Form must be signed by the Life Assured and an Authorized Signatory mentioned in the Board Resolution, along with the Company’s Seal.

Documents Required for Keyman Insurance

• Board Resolution of the Company approving the purchase of Keyman Insurance and appointing an authorized signatory.
• Keyman Questionnaire.
• Income Tax Returns, Profit & Loss Account, and Balance Sheet of the company for the last 3 years.
• Income Tax Returns of the Keyman for the last 3 years.
• KYC documents of the Keyman, including passport-size photo, PAN card, Aadhaar, etc.

Beneficial Ownership

Mandatory for all cases along with KYC documents of the beneficial owner.