Individual Protection from AIG

Key person protection

Businesses will, in most cases, own various forms of insurance either because it is a legal requirement or to manage the risk of financial loss to the business. However, none of the above covers the risk of losing a key employee.

Why recommend Key person protection?

Key person protection can help insure against the financial losses that may arise if a key employee (also referred to as a key person) dies, becomes terminally ill or suffers a critical illness. It pays out a lump sum, giving the business the funds to meet its ongoing financial needs.

Who are the key persons in a business?

A key person is any individual in a business whose skill, knowledge, experience or leadership contributes significantly to its continued financial success. Key persons might include owners, managing directors, sales managers, research and development staff, creative or technical experts and sole traders.

Setting up key person protection

Key person protection provides insurance through a life insurance or life and critical illness policy that can be taken out on the lives of its key people. The plan can be owned by the business, or by an individual business owner.

 A claim can be made if a key person dies, is diagnosed with a terminal illness or suffers a critical illness. The proceeds can then be used to meet the financial needs of the business while it recruits a replacement or undergoes reorganisation.

Things to consider

Download the Business Protection Adviser Guide for help with the following:

  • Understanding how the key person can be insured;
  • How to calculate the value of a key person; and
  • The tax implications of key person protection.

Literature and support materials


Reasons why – AIG Business Protection

Business Protection Term Assurance / Business Protection Critical Illness with Term Assurance

Business Protection - Adviser guide

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