LIC Keyman Insurance for your company directors - LIC of India

 Keyman Insurance from LIC of India

Keyman insurance is taken by a small and large business firm on the life of most important employee(s) like CEO, COO, Director etc. to protect the firm against financial losses, which may occur due to the sudden, accidental or premature demise of the Keyman person. What is a 'Keyman (KM)'?  The term indicates a person who is an employee in a business organization at such an important post (an executive, a director, an expert, a technocrat etc.) whose death would result in a financial loss to the organization. What is 'Keyman insurance'? Life insurance corporation (L.I.C) of India provides the policies for such employees of a business organization whose premature death would cause a financial loss to the organization. The insurance taken on the lives of such person to protect the business from financial loss is called 'Keyman insurance'. The premium on such policies has to be paid by the employer. Eligibility for key man insurance  The 'key man insurance (KMI) is allowed to the employee if he satisfies the following condition; The 'Keyman' should hold less then 51% shares of company.  The total no. of shares of the company held by the key man and his family should be shares of the company held by the Keyman and his family should be less then 70% The Keyman should be literate. Factors to be considered for insurance cover on key-man's life. Key-man's qualification.  Experience in different fields. Previous record and service period in the organization. Is he the only key-man in the specific field or otherwise? Salient features: Proposer - the company  Plans allowed - 164 only  Term- 10-15 years on the basis of retirement age or service contract. Accident benefit and nomination are also not allowed. Assignment is allowed only in case of absolute assignment in favor of the key-man if he leaves the job of the company. In the standard policy forms following changes should be done while issuing the key-man insurance. Delete the words "nominee under section 39 of the insurance act". Write the name of the life assured and proposer.  Place the following endorsement on the policy:- either absolute assignment in favor of the life assured (KM) or surrender to LIC for its cash value.  Max. age at entry - 65 years.  Maturity age -75 years.