Key Man Insurance Singapore

Key man insurance protects businesses against the financial impact of losing crucial employees through death, disability, or critical illness. In Singapore's competitive business environment, it helps ensure business continuity, protect shareholders' interests, and maintain stakeholder confidence.

Coverage amount should be based on factors like the key person's contribution to revenue, cost of replacement, outstanding business loans, and potential business impact. In Singapore, common methods include multiple of salary, contribution to profits, or cost of business interruption.

Common types include term life insurance, whole life insurance, and critical illness coverage. Some policies combine multiple coverages. The choice depends on business needs, budget, and whether the business wants to build cash value.

In Singapore, key man insurance premiums may be tax-deductible if the company is both the policyholder and beneficiary, and the insurance is purely for business purposes. However, it's advisable to consult with a tax professional for specific cases.

Most insurers allow changes to the insured key person, subject to underwriting and terms. This flexibility is important as roles and personnel change. Some policies may require cancellation and new application, while others allow transfer of coverage.