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What is keyman insurance?
If you are going to be LIC Agent or you are already LIC agent in Mumbai or you have a company to run ,then this article is much beneficial to you.As a LIC Agent in Mumbai,you keep thinking to grow your business . Keyman Insurance is one of the biggest tool, you have to grow.
In today’s world of professional management success of a company solely depends on individual talent of certain managers who is vision skill integrity and managerial capability is essential for the future progress and prosperity of the company.
Exit or premature death of Key person is in the most cases result in financial losses to the company. The question arises how does a company replace talent like that?
The company all the lives of such key persons purchases keyman insurance in in event of premature death of key person company gets the insurance proceeds.
Keyman insurance proceeds will cover:
The loss of sales attracted by his/ her ability and personality.
The Lost due to his / her day to day special skills.
The cost of recruiting and training a suitable replacement.
The cost of delay or cancellation of any project upon he/she is working.The loss of opportunities for future expansion.
The loss of a stable management and good labour relations.
The reduction of credit standing of the company due to withdrawal of credit facilities by bank and other institutions
recall of existing loan guaranteed by keyman
refusal of suppliers to deliver goods without prior payment.
Who is KeyPerson in a company
E -Commerce manager etc
Eligibility of Companies for Keyman Insurance
Key man insurance is open to all categories of business firm expect
Partnership firms owners
Firms where shareholding of key person is over 75% and family share holding of the key person is over 90%.( family include A spouse and minor children only ) beyond this limit but less than hundred percent holding by key man can be considered at CUS on case to case basis.
Company not making profit for last three consecutive years.
When the profit and turnover of a company are on the decline.
Requirements of keyman insurance proposal for companies
1 copy of memorandum and article of Association
2. Copies of audited balance sheet and profit and loss account for preceding 3 years.
3. Certified true copy of board resolution passed in the meeting of board of director containing following information
Sum assured desired
Signature of the person who is authorised to complete proposal papers
The use of seals of the company
4. Keyman questionnaire to be completed in the prescribed format and the same is to signed by the authorised person under the seal of the company.
5. Copies of ITR of the company for 3 years
6. Consent for the endorsement for assignment/ surrender to be placed on the policy.