Introduction:
Keyman is a key member or staff of the
organisation who is a major contributor
to its growth and profit and whose absence
may effect the continuity of the business.
Keyman
Insurance is taken by the Company on the
life of the key member or staff.The main
objective of Keyman Insurance is to compensate
for the financial losses suffered following
the death of key member or staff of the
organisation.
The
aim is to indemnify the company of these
losses and to allow business continuity.
All
premiums paid for securing a Keyman life
insurance policy are treated as business
expenditure u/s 37 (1).
Shield
plan is available for the purpose of Keyman
insurance.
Purpose of Keyman:
It protects the organisation against any
of the following losses
The loss
of customers or sales.
The loss
of day -to -day specialised skills.
The cost
of recruiting and training the suitable
replacement.
Delay or
cancellation of any business project that
keyman was associated with.
The loss
of opportunity for future explanation.
Recall
of existing loan guaranteed by the keyman.
Product type:
It is a pure term insurance Plan.
Tax Benefits
Companies
may claim the premium paid under Keyman
insurance as a business expenses under
section 37(1) of the income tax act.
As per
the finance bill 1996, the amount received
under a Keyman insurance policy will not
exempt from tax under Section 10(10D)
of income tax act. The proceeds of policy
will be treated as income under section
28(vi) of income tax act.
In the
event of the policy being assigned to
the Keyman, the proceeds of the policy
including bonus will be treated as "Profit
in the Lieu of Salary" under section
17 (clause 17 ) of Income Tax Act.
Who can buy this product?
Organisation buy this product to protect
the organisation against the cost cused
by the death of key member of organisation.
Riders Available
No Riders are available.
For more details on risk factors, terms
and conditions please read the sales brochure
carefully before concluding a sale.
It protects the organisation against any
of the following losses 