• About Us
  • Our Partners
  • Become an Advisor
  • NRI
  • QROPS
  • Careers
  • Alumni Portal
  • Public Disclosures
Select a language English
  • Pay Premium
  • COVID-19
    Assistance
    Covid-19 Crisis
  • Our
    Products
    • Protection Plans
    • Savings & Investments
    • Retirement & Pension
    • Group Business
    • QROPS
    Covid-19 Crisis
  • Our
    Funds
    • Fund Fact Sheet
    • Market Review
    • Check NAV
    • Market Highlights
    • Annual Fund Review 2020-21
    • Covid-19 Crisis
  • Knowledge
    Center
    • Blogs and Articles
      Term Insurance early bird offer

      With Term Insurance - It pays to be an early bird

      View All

    • Video library
      keep your family secured

      60 seconds is all it takes to keep your family secured!

      View All

    • FAQ

      What is the claims process at Exide Life Insurance?

      View All

  • Planning
    Tools
    • Calculate How Much
      Life Cover You Need
    • Risk Analyser
      Life Insurance
    • Child Education Planner
      Number
    • Know Your Retirement
      Number
    • Investment
      Calculator
  • Customer
    Service
    • Premium Payment Options
    • Self Service

    • Instant sign-up for Auto Debit
    • All Claims
    • Download Center
    • Term Insurance early bird offer

      Track your Application

    • Term Insurance early bird offer

      Track your
      Claim

    • Track your Service Request

Eng
Pay Premium
  • Our Products
  • Our Funds
  • Knowledge Center
  • Planning Tools
  • Customer Service
  • About Us
  • Our Partners
  • Become An Advisor
  • NRI
  • QROPS
  • Careers
  • Alumni Portal
  • Public Disclosures
  • Share via:
    • Home/
    • Our Funds /
    • Knowledge Center/
    • Blogs and Articles/
    • Term insurance reduces business risks too

  • Categories:
  • Term Plan
  • Health Plan
  • Savings and Investments
  • Retirement
  • Tax Planning
  • Services
  • All

Term Insurance reduces business risks too!

  • Min
  • Views
keyman insurance policy key man term life insurance
  • Keyman insurance is a great financial recourse for companies when they lose a key functionary.
  • It gives many benefits such as reduced taxable income, availability of needed funds and even boosting the morale of the keyman himself
MAR_DI_178

Many of the businesses in India are privately owned; which means that there are single or multiple members of a particular family who control the functioning of the whole business. These individuals are the face of the company, to the general public and to the investors as well. They are the ones who hold sway over most of the critical decisions taken in the company, and also define its future trajectory.

If something were to happen to them, it would have an impact not only on the family but the business as well. This is where keyman insurance comes in. It is a policy that is similar to term insurance, but for businesses. It helps the business emerge from the loss of one of its key functionaries.

A ‘keyman insurance’ is essentially a cover, the payout from which helps a business recover from the loss of a valuable asset such as its owner, partner, CEO, GM, or any employee the company considers to be an integral part of its functioning.

Definition of Keyman Insurance

 

Keyman insurance can be defined as an insurance policy where the proposer is a company, the premium is paid by the company, the claim also goes to the company, but the insured is an employee. This employee discharges significant responsibilities, contributes immensely to the company profits and is therefore crucial to the working of the business.

This employee is given the term ‘keyman’, though the insured can be a woman as well. The purpose of keyman insurance is to cover the life of the keyman, so that in the event of his/her untimely death, the company can recoup the financial loss from the sum assured.

As said earlier, the keyman is a key functionary and his passing will likely result in a financial strain on the business. This cover is intended to help the company regain from the stumble and continue in a sustainable manner.

Benefits of Keyman Insurance

There are numerous benefits that keyman insurance can provide to a company. Here are some of them:

  • Premium paid for keyman insurance is treated as business expenses under section 37(1) of the Income Tax Act. Hence, the premiums paid by the company are deductible from its taxable income.
  • An obvious benefit is that key insurance will protect the business from risk resulting from the death of its keyman.
  • With the passing of the keyman, the business can suffer from disruption of line of credit. The payout from insurance can help the company pay its bills/loans during this difficult time.
  • This type of insurance can also keep the company’s share stable at the time of death of its key functionary. Company shares generally fall on hearing such news, but if investors know that any financial loss can be recouped through the insurance proceeds, they may not start selling their shares.
  • On the other hand, keyman insurance helps the company further, when the keyman learns about it. This results in his/her morale getting boosted, which increases productivity and helps in retaining them for a longer period of time.

Scope of Coverage

There can be one or more key functionaries (keyman) in the company, and this insurance can be taken out on all of them. Partners in a partnership firm can also avail keyman insurance. A loss-making business or a company with declining profits, are normally not issued keyman insurance, but there have been exceptions.

The sum assured in keyman insurance varies from insurer to insurer, but here is a general outlook and the sum assured will be lower than the scenarios mentioned here:

Firstly, the sum assured will not exceed the amount that is ten times the compensation package of the keyman.

Secondly, the amount will be lower than three times the ‘average gross profit’ that the firm has achieved in the past three calendar years.

Thirdly, it will not cross five times the company’s ‘average net profit’ for the last three years.

Keyman insurance is an absolute must for businesses in India, which are mostly run by family members. According to the insurance regulator, only term plans can be utilised for this insurance. Exide Life Insurance offers affordable term plans that help you secure your businesses’ future.

Term Plan
  • Likes
  • Shares

Connect with us

Name is a required field
Age is a required field
Gender is a required field
City is a required field
Email is a required field
Mobile is a required field
You have exceeded the number of times an OTP can be generated, request you to please try after sometime.
I have read and agree to the disclaimer

Disclaimer


By submitting your contact details (Telephone number), you authorize Exide Life Insurance and/or its authorized service provider to verify the above information and/or contact you in relation to the insurance products sold by Exide Life insurance even if this telephone number is presently or subsequently registered on the Provider. Do Not Call/Do Not Disturb Register or the National Do Not Call Register.

Enter the OTP which was sent to your number

Please enter new Mobile
OTP is a required field
You have exceeded the number of times an OTP can be generated, request you to please try after sometime.
Submit Change Mobile Resend OTP

*The OTP will be valid only for the next 15 minutes. In case, if you have not received the OTP, click on Resend OTP.

Verification Successful

Thank you for visiting our website and showing interest in Exide Life Insurance. Our representative will get in touch with you shortly.

Back To Home

Related Articles

Related Articles

Related Videos

Related Videos

You may also like this

Exide Life Group Term Life Solutions

Increase the economic security of your valuable employees at an affordable cost with a comprehensive life insurance cover.

Read More

You may also like this

Exide Life Group Term Life Solutions

Increase the economic security of your valuable employees at an affordable cost with a comprehensive life insurance cover.

Read More

Connect with us

Name is a required field
Age is a required field
Gender is a required field
City is a required field
Email is a required field
Mobile is a required field
You have exceeded the number of times an OTP can be generated, request you to please try after sometime.
I have read and agree to the disclaimer

Disclaimer


By submitting your contact details (Telephone number), you authorize Exide Life Insurance and/or its authorized service provider to verify the above information and/or contact you in relation to the insurance products sold by Exide Life insurance even if this telephone number is presently or subsequently registered on the Provider. Do Not Call/Do Not Disturb Register or the National Do Not Call Register.

Enter the OTP which was sent to your number

Please enter new Mobile
OTP is a required field
You have exceeded the number of times an OTP can be generated, request you to please try after sometime.
Submit Change Mobile Resend OTP

*The OTP will be valid only for the next 15 minutes. In case, if you have not received the OTP, click on Resend OTP.

Verification Successful

Thank you for visiting our website and showing interest in Exide Life Insurance. Our representative will get in touch with you shortly.

Back To Home

Connect with us

Name is a required field
Age is a required field
Gender is a required field
City is a required field
Email is a required field
Mobile is a required field
You have exceeded the number of times an OTP can be generated, request you to please try after sometime.
I have read and agree to the disclaimer

Disclaimer


By submitting your contact details (Telephone number), you authorize Exide Life Insurance and/or its authorized service provider to verify the above information and/or contact you in relation to the insurance products sold by Exide Life insurance even if this telephone number is presently or subsequently registered on the Provider. Do Not Call/Do Not Disturb Register or the National Do Not Call Register.

Enter the OTP which was sent to your number

Please enter new Mobile
OTP is a required field
You have exceeded the number of times an OTP can be generated, request you to please try after sometime.
Submit Change Mobile Resend OTP

*The OTP will be valid only for the next 15 minutes. In case, if you have not received the OTP, click on Resend OTP.

Verification Successful

Thank you for visiting our website and showing interest in Exide Life Insurance. Our representative will get in touch with you shortly.

Back To Home
  • Key Links

  • Buy Online
  • Buy Guaranteed Returns Insurance Plan
  • Buy Zero Cost Term Insurance
  • Buy Term Plan with Return of Premiums
  • Buy Heart & Cancer Insurance
  • Buy Single Premium ULIP Plan
  • Buy Investment with Insurance Plan
  • Buy Savings cum Insurance Plan
  • Buy 5 Pay Savings Plan
  • Buy Unit Linked Pension Plan
  • Buy Simple & Affordable Term Plan
  • Buy Guaranteed Income Benefit Plan
  • Get a Quick Quote
  • Term Plan Calculator
  • Financial Calculator
  • Have Queries?
  • To Buy Policy Online : 1800 419 0808
  • For Policy Servicing : 1800 419 8228
  • Write to Us
  • Life Insurance Plans
  • Smart Term Pro
  • Smart Term Edge
  • Saral Jeevan Bima
  • Term Insurance Comparison
  • Critical Illness Insurance
  • Term Riders
  • Retirement & Pensions
  • QROPS
  • Health Insurance
  • Critical Illness Rider
  • Group Insurance Scheme
  • Group Insurance Policy
  • Group Term Life Insurance
  • Group Gratuity Scheme
  • Group Critical Illness Insurance
  • Investment Options
  • Endowment Plans
  • Endowment Assurance Plan
  • Secured Income Insurance Plan
  • Long Term Investment
  • Tax Savings Investments
  • Single Premium ULIP Plan
  • Child Plans
  • Child Investment Plans
  • Customer Service
  • Track your Application
  • Track your Service Request
  • Register for Auto Debit
  • Claims
  • Claim Forms
  • Track your Claim
  • Check Unclaimed Amount
  • About Us
  • Management Team
  • Media Centre
  • Awards and Recognition
  • Corporate Social Responsibility
  • Forms
  • My Money Book
  • FAQs
  • Term Insurance FAQs
  • Online Term Insurance FAQs
  • Life Insurance FAQs
  • Retirement & Pension FAQs
  • Child Plans FAQs
  • Savings and Investments FAQs
  • Blogs and Articles
  • Video Library
  • Security Tips
  • Privacy Policy
  • Tax Center
  • Withdrawn Products
  • Sales Illustrator
  • My Connect
  • About E-insurance
  • Terms of Use
  • New Business Premium
  • IRDAI
  • policyholder.gov.in
  • Member of the Life Insurance Council
  • IRDAI IGMS
  • Modification in NAV Computation
  • Grievance Redressal
  • Disclaimer
  • DNC (Do Not Call)
  • Intellectual Property Rights
  • Phishing
  • API & Development
  • HDFC Life

IRDAI notice : Beware of Spurious/ Fraud Phone Calls: IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.

Exide Life Insurance Company Limited.
IRDAI Registration Number: 114, CIN:U66010MH2000PLC377660
Registered Office: First Floor, Unit No.5 to 8, Inizio Building, Opp P&G Plaza, Cardinal Gracious Road, Chakala, Andheri East, Mumbai – 400 099, India
Corporate Office: Third Floor, JP Techno Park, No. 3/1, Millers Road,
Bangalore- 560 001, India.
2022 Exide Life Insurance Company Limited. All rights reserved.

  • IRDAI Public Notice on Spurious Calls
  • Sitemap
  • FAQ
  • © 2022 Exide Life Insurance Company Limited
loading

Please rotate your screen for
optimal experience

    • Share via:
Buy Online :
  • Smart Term Edge
  • Single Premium ULIP
  • Locate a Branch
  • Service Queries
  • Speak to our Expert
  • Smart Term Edge
  • Single Premium ULIP
  • Locate
  • Speak to our Expert
  • Buy

Have Us Call You

Disclaimer


By submitting your contact details (Telephone number), you authorize Exide Life Insurance and/or its authorized service provider to verify the above information and/or contact you in relation to the insurance products sold by Exide Life insurance even if this telephone number is presently or subsequently registered on the Provider. Do Not Call/Do Not Disturb Register or the National Do Not Call Register.

Please enter first name
Please enter a valid Birth date
Please enter a valid email id
Please enter mobile number Please enter valid number
Please select gender
Please select state
Please select city
Please select best date to call
Please select best time to call
Please select Preferred purchase mode
Please select Where did you find about us
Disclaimer Disclaimer
Generate OTP Reset

*Clicking on Generate OTP will send a One Time Password to the entered Mobile Number. Please use this password for verification

Enter the OTP which was sent to your number

Please enter OTP Please enter correct OTP or Regenerate OTP Your OTP has expired. Please Regenerate OTP.
Submit Please wait Re-generate OTP
You have exceeded the number of times an OTP can be generated, request you to please try after sometime.
OTP Regenerated. Please enter the new OTP
*The OTP will be valid only for the next 15 minutes. In case, if you have not received the OTP, click on Regenerate OTP.

Have Us Call You

Verification Successful

Thank you for visiting our website and showing interest in Exide Life Insurance. Our representative will get in touch with you shortly.

 

Back To Home