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Keyman insurance?

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Does anyone have any experience of Key Man[person] insurance. Myself and my partner run a small business together [as 50% shareholder directors] but he does most of the work at the mo as Im looking after the kids more often. I am looking to get Keyman insurance to cover him in case he gets ill as we would REALLY be in trouble and its a lot of pressure on him.

Can anyone recommend any firms to go to? We dont have massive profits and a IFA i saw just tried to sell us tons of v expensive critical illness. Income protection doesnt really work in this context as our income is really low [based on salary]. Keyman looks like the way to go but I dont know where to start.

Thanks in advance
x

Comments

  • dunstonh
    dunstonh Posts: 119,679 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    We dont have massive profits and a IFA i saw just tried to sell us tons of v expensive critical illness.
    Why do you think you were trying to be sold it?

    The IFA has a responsibility and requirement to first recommend to your shortfalls. Failure to do so would leave them liable to complaint and financial redress if they didnt advise you as such and you had a claimable event.

    Once your budget is known, then a suitable product to meet the need as much as you can within your budget would then be recommended with a warning that it is insufficiant.

    Are you sure it was an IFA you saw as this sort of transaction is so simple and not going to your budget but focusing on full need seems to be an error or lack of judgement you expect with a new adviser?

    Most providers you cannot go direct to provider or if you can, you dont get any real discounts. If you know what you want you can go execution only to IFAs like Cavendish or check out some of the IFAs with websites offering discounts.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • shaunrc
    shaunrc Posts: 207 Forumite
    Hi

    Dunstonh has made some valid points.In the end you choose how much cover you take and in a regulated environment we may not be far away from the day when someone is sued for not recommending enough cover!

    I also work as an IFA and would like to add something to the debate.To get favourable tax treatment you would not badge the cover as keyperson cover as with 2 shareholders the Revenue wont accept it. There are other ways though.One of the values of using an IFA is this sort of thing as at best tax treatment of keyperson cover is strict and at worst the revenue wont except it at all.
    I am an Independent Financial Adviser. For regulated individuals like me there are rules on giving financial advice. Therefore any posts I make are meant to be helpful but are not financial advice.
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