Sean Williams is a Director for a well-known marketing company. One of their employees, Derek Smith, was a valuable member of the team and drove up the company profits over a number of years. His skills and knowledge were vital to the success of Sean’s company.
Overnight everything changed drastically for Sean, when 54-year-old Derek suffered a fatal heart attack leaving behind not only his family, but the future of Sean’s business in jeopardy.
The company employees were in shock and it was a struggle to pick up morale. Sean was facing a difficult challenge and it was unclear whether the business would recover.
Sean recalled the advice and documents he had been given about Key Person Cover but he had declined to take this out. After all, these scenarios rarely happen so why would he pay that extra for something which at that time he thought he would never need.
Sean had been advised to take out Key Person cover to protect his business in the event of a key member of staff suffering a critical illness or death. It was designed to pay out a lump sum or a regular income to the business.
Following Derek’s death, he realized that this was exactly what he needed, but it was too late.
Do you own a business and have key employees that are valuable to the running of your business?
Please note, that the case study is based on a real-life scenario, but names have been changed due to client confidentiality.
Published March 2021.
It is important to take professional advice before making any decision relating to your personal finances. Information within this case study is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for information purposes only.