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Can I Buy Life Insurance For An Employee?


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Q:

i like to know i wish to buy life insurance for my worker and i need to know what to do and hope you reply me pls leave your handphone to me

A:

Businesses can purchase Key Man Life Insurance or offer employees Group Life Insurance coverage as an employment benefit. In order to better understand your need it would be important to first define which type of business life insurance product you are attempting to purchase.

Key man Life Insurance For Hong Kong Businesses

Key Man Life Insurance plans are designed to protect businesses against the costs associated with the loss of a vital member of staff.

As a business you have important employees in key positions. For small businesses and startups it can be extremely difficult to operate without specific people, often a founder, or highly important C-suite executive. This becomes especially important when looking at issues like raising capital as many startups and businesses are intimately associated with their vital, and often synonymous, employees (think Steve Jobs at Apple); losing a key person to death or serious long term illnesses can have an extremely detrimental impact on the overall value of the company.

A Keyman Life insurance policy will assist the company in managing the loss of the important member of staff by providing a financial settlement which will allow for:

  • Training and Recruitment costs to find a replacement for the absent employee
  • Financial protection against lost profits resulting from the absence of the employee
  • Possible offset in lost sales and customers depending on the job duties of the employee

A Key Man policy provides coverage which is often highly specific to the company and member of staff being insured. The variables which go into pricing the policy, and the coverage it offers, often include things like the employee’s salary, the company’s annual revenue, the employee’s job duties, and the industry the company is operating in.

Group Life Insurance Benefits

The second type of corporate Life Insurance product that businesses can obtain is a “Group Life Insurance” plan, which would be form a part of a traditional employee’s benefit package.

In this case, the group life insurance policy will cover the employee against their own death – meaning that the employee’s beneficiaries, and not the company, would receive any settlement that may be owed due to death or permanent disablement.

This type of corporate life insurance coverage is usually a yearly-renewable Term Life Insurance plan. The premium is generally dependent on the total number of employees being covered, their salaries, and their ages. It is important to note that a yearly-renewable term life insurance plan will normally increase each year, as the majority of Hong Kong Insurance companies will price these policies with age as the core variable.

More Corporate Life Insurance Information

Unfortunately CCW Global is unable to provide life insurance quotes on our ASK platform. If you would like to receive a free life insurance quote in Hong Kong, or if you would like to learn more about business life insurance products offered by CCW, please Contact Us Today

Answered on: 7 September, 2017 15:10


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