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Final PPT Keyman Insurance

Keyman Insurance is a policy taken by businesses on the lives of key employees whose contributions are vital to the firm's success, providing financial protection against the loss of earnings due to their death. The policy helps cover the costs of hiring and training a replacement, assures stakeholders of business continuity, and pays a death benefit to the employee's family. Eligibility for this insurance is restricted under certain conditions, and tax implications are outlined under the Income Tax Act, 1961.

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231 views13 pages

Final PPT Keyman Insurance

Keyman Insurance is a policy taken by businesses on the lives of key employees whose contributions are vital to the firm's success, providing financial protection against the loss of earnings due to their death. The policy helps cover the costs of hiring and training a replacement, assures stakeholders of business continuity, and pays a death benefit to the employee's family. Eligibility for this insurance is restricted under certain conditions, and tax implications are outlined under the Income Tax Act, 1961.

Uploaded by

vinay.punjab82
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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KEYMAN INSURANCE

CORPORATE SOLUTIONS
Insurance taken by a business firm on the life of
an employee (Keyman) whose services contribute
substantially to the success of the business firm
KEY
KEYEXECUTIVE
EXECUTIVE KEY
KEYEXECUTIVE
EMPLOYEE

WHOLE TIME WORKING


KEY EXECUTIVE KEY EXECUTIVE
DIRECTOR PARTNER

Their Talent and Experience account for much


of the success of the Business

Who cannot be easily replaced by virtue of


their long experience or special qualifications
To indemnify business firm from the loss of earnings
resulting from the death of valuable employee.

Loss of earnings may occur because immediate re


placement of the Keyman may not be possible and
it may take longer time to train other person to
perform his function.
▪ Replace loss of profits
▪ Provide funds to recruit, hire & train suitable
replacement
▪ Assure Customers, Creditors and
Employees in the continuity of the business
▪ Pay a death benefit to the Keyman’s family
(partly as a compensation)
Key person insurance is taken by a business concern for
its own benefit and not for the benefit of its employee /
individual
▪ Premium is paid by the Business Concern and
booked as expense in the books of company.
▪ Business Concern retains the right to the policy
▪ Business Concern is eligible to receive the death
claim
Keyman Insurance cannot be given in the following cases:

▪ The Company/Firm consistently incurring losses


▪ The Keyman is illiterate
▪ Any person who is not an employee like creditor, advisor, audit
or, surety, trustee, agent, supplier etc
▪ Individual ITR of Keyperson is less than 5 Lacs.
▪ Insurance premium paid pay the employer on
such Keyman insurance policy shall be
deductible under section 37(1) of the Income
Tax Act, 1961

▪ The amount received by a business entity


under Keyman Insurance policy is business
income of an entity under section 28(vi) of
the Income Tax Act, 1961

Consult your tax advisor for more details on tax aspects


• Individual Pan Card
• Address proof
• Income tax returns with computation
past 3 years.
• Coloured photo.
• Existing insurance details SBI Life and
others.
a. Certificate of Incorporation & Pancard of company/firm.
b. Memorandum and Articles of Association / Partnership
deed.
c. Latest Audited balance sheet past 3 years.
d. Latest Share holding pattern duly certified by the
company.
e. Address of Registered office/ Main place of business
f. Name of board of directors and CEO duly certified by the
company.
g. Copy of Bank account Statement of the Company.
• Maximum eligibility of the Company/Firm will be five times of
average 3 years net profits (after tax and depreciation) or 3 times of
average 3 years gross profit .*
Or
• Bank exposure limits.*

*These are general guidelines for calculating the Sum Assured


however the final decision is subject to underwriters discretion.
▪ To find out renewal renewal/enhancement dates.
▪ To request data requisite for financial pre underwriting.
▪ As per RMME comfort we will start meeting the CFO/ Keyman for
pitching our product.
▪ Pitch COMBO products as well (Investment + Keyman) or
(Investment + Swadhan Policy)
▪ We will ensure end to end solution for Keyman policy, from pitching
the product to ensuring issuance of policy.

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