The benefits of having a solid China Keyman Insurance policy for your company are vastly understated.  As a business owner in China or another country, protecting your business financially from unforeseen circumstances is paramount. It’s almost essential.

Do you own a business and want to protect your company? Do you know what China Keyman insurance is and how it can benefit your company? Here is a guide to Keyman Insurance and how it can work to protect your company’s best interests.

What is China Keyman Insurance? 

Protecting your company from the tragedy of death or illness to a key company member is something you need to consider. And that’s exactly what China Keyman Insurance covers. 

No-one likes to think about the worst-case scenarios when running a business but it’s our responsibility to think that way. And no-one likes to consider death to an employee or anyone you are close to. However, covering all bases is part of running a business. Everything has to be taken into consideration.

Keyman Insurance will give your company financial protection to mitigate the effects of death or severe illness to a key employee. It’s essentially life insurance for the critical persons in your company. This could be shareholders, key directors, partners, people with special skills, or other important members of your business. In this instance, Keyman Insurance offers compensation in the event of death to a key member. This will help to sustain your company’s position, visibility, and/or profitability. The coverage can help to offset any financial or operational difficulties incurred by the death of a key staff member. It offers financial assistance in areas affected by the death. 

Benefitting from Keyman Insurance – Possible Scenarios 

There are numerous scenarios where having China Keyman Insurance can help to safeguard your company in difficult times. Every company has a few vital employees whose roles are important to the running of your business. It’s up to you to decide who these members are. 

Let’s say that your key employee ‘Jeff’ works in a pivotal role in your company and is of great importance to your firm’s operations. If something happened to Jeff such as death or illness, your company’s operations could fail, which would negatively affect profitability. If your company already has Keyman Insurance coverage, there would be a payout when Jeff sadly passes away. This money would then be injected into operations to cover any losses incurred from Jeff’s untimely demise. This would be similar to a parachute payment, or something similar to a life insurance policy.

Basic Eligibility for Keyman Insurance

Some basic conditions need to be met for you to be eligible for China Keyman Insurance. Here are some of the issues your company need to consider in terms of eligibility:

1. The ‘key man’ you are adding to your prospective Keyman Insurance policy must own less than 51% of shares in your company. 

2. The total number of shares that are held by your ‘key man’ and their family members must be less than 70%.

3. There needs to be proof that your ‘key man’ has a critical role in your company that could affect your operations and profitability as the result of sudden death.

It’s important that the person you are putting forwards for your ‘key man’ insurance matches those criteria above.

8 Benefits of a China Keyman Insurance Policy 

Now we have discussed the definition of China Keyman Insurance, eligibility factors, and also possible scenarios where coverage is vital, it’s time to take a closer look at the benefits for your company.

The business world can be a cold and lonely place. And although it could seem a little cold to obtain payments because of the death of an employee, you have to look at the bigger picture. You have a business to run and responsibilities to your employees. Here are several benefits to having a viable Keyman Insurance policy for your business:

1. Protection: Your business will be protected in a financial sense due to the unfortunate death of a key worker.

2. Savings: The premiums you receive in the event of death will be business expenses, which could be offset against any taxes your company pays, depending on the local rules of region.

3. Helping with Credit: If business credit lines are hampered by death, the insurance money can help as a guarantee of loan repayments.

4. Morale: You will boost the morale of the key-person in question because you see their role as pivotal to the smooth operations and profits of your company. It’s the ultimate ‘pat on the back’ for a key employee.

5. Stability: The main reason to get China Keyman Insurance is to ensure stability for your company when a key person suddenly passes away. Death could affect company share prices. Having this type of coverage will aid the stability of your company.

6. Protecting Company Valuation: Having Keyman Insurance can help to protect your company’s valuation, and can give your firm a higher valuation because you have a financial back-up plan in the case of the death of a key worker. It’s a good thing for the reputation and valuation of your firm.

7. Business Continuity: If a key person in your company dies, the financial support will allow you to fill the void quickly. Business continuity is important in terms of operations and profits.

8. Customer Perception: If your company has a good reputation for taking care of its key workers, you will look great in the eyes of your customers. Many customers will associate the way you treat your workers with the quality of your company. It’s a win-win loophole for you.

Finding the Best China Keyman Insurance Policies

Now you know how important it is to protect your company in the sad event of the death of a key worker, how do you find a policy that suits your company? How can you ensure you are getting the best choice of policies that benefit you?

The life insurance industry is a potential minefield. You have to know how to take the correct path and be careful where you tread. 

Do you go directly to insurance companies for Keyman Insurance quotes? How can you be sure that the insurance companies are reputable and have your best interests in mind? Do you have the knowledge to properly compare the policies from various insurance companies?

Don’t worry. If you are unsure of the path to take, you must obtain the services of a reliable insurance broker in China that will give you the best impartial advice with your best interests in mind.

Differences Between Insurance Providers and Insurance Brokers

You might not realize this. But the differences between an insurance provider and an insurance broker are akin to night and day. They are the complete opposite.

An Insurance Provider is a stand-alone insurance company. These insurance companies offer you their policies. They try to sell you their coverage plans and are only interested in obtaining you as a customer and their profit margins. That’s their job. Don’t get mad about it.

An Insurance Broker, on the other hand, works on your behalf to find you a policy that suits your needs, and most importantly, your budget. An insurance broker will find you the best deals from insurance companies and help you to compare them to make the correct choice. The broker is there to help you. While the insurance provider is there to help themselves. It’s that simple.

Insurance brokers are also experts in the local insurance industry and all the nuances that are an intricate part of the sector. So in effect, you can use their knowledge to ensure you are not ripped off by insurance providers.

Are you considering China Keyman Insurance for your company? The benefits are plentiful. You will be protected financially in the event of sudden death to a key worker. There is nothing cold or callous about protecting your best interests. It’s why having a business is all about. Just make sure you have the guiding hand of a reliable insurance broker on hand so you can make the best educated decisions.