Keyman insurance comparison, and how to get a quote

From an insurer directly, or through a specialist broker or an independent financial adviser: MoneyHelper lists all three among the places to get life insurance quotes.

Before you ask, have the key person’s date of birth and smoking status, the cover type (life, or life with critical illness), the cover amount and the term.

Those are what Legal & General asks for at the quote stage; the full medical questions come with the application. MoneyHelper ↗

For the quote itself, Legal & General asks for date of birth, whether the person has smoked or used nicotine in the last 12 months, the type of cover, the amount and how long it should last.

The application then asks about medical history, family medical history, medication, smoking, and height and weight.

For key person cover the business must also be able to show it would lose profits without the person, and Aviva asks for a full financial questionnaire above £2.5 million of life cover or £1 million of critical illness cover. Legal & General ↗

There is no single best quote, and we do not rank insurers.

A keyman insurance comparison is only fair when both quotes price the same cover: the same term, cover amount, cover type, level or decreasing cover, and guaranteed or reviewable premiums.

Even then, MoneyHelper says it is not simply a case of signing up to the cheapest policy: check what each covers and excludes.

An FCA-authorised adviser can recommend one for your business. MoneyHelper ↗

We found no insurer that publishes key person premium rates, because the price depends on the person: MoneyHelper lists age, smoking, health, family history, job, the product and the term.

The nearest published figures are a broker’s: Drewberry’s examples from its own quote engine, as at August 2025.

Our key person insurance cost guide sets out what is published. Key man insurance cost guide ↗

Not until the insurer has underwritten the application.

Legal & General says that with your consent it may look at medical records before deciding whether to approve or decline an application, and that premiums are guaranteed once the policy has been agreed and is in place.

Some policies have reviewable premiums instead: MoneyHelper says these are usually reviewed after a set period, usually every five years. Legal & General FAQs ↗

Yes. MoneyHelper lists specialist brokers among the places to get life insurance quotes, and says a broker might charge a fee or be paid commission by the insurer.

Ask which before you start, and check the firm on the FCA’s Firm Checker before you buy. MoneyHelper ↗

Key person insurance (also known as keyman insurance or key man insurance) is a policy a business takes out on someone it depends on, such as a director, owner or key employee.

HMRC describes it as cover an employer takes out in its own favour against loss of profits from a key person’s death, critical illness, sickness, accident or injury.

The business owns the policy, pays the premiums and receives any payout. HMRC BIM45525 ↗

It depends on the person and the policy: MoneyHelper lists the product, the term, age, smoking, lifestyle, health and job among the factors.

We found no insurer that publishes a key person premium.

One broker, Drewberry, published examples from its own quote engine in August 2025: for a healthy non-smoking director with office-based duties and £150,000 of level cover over 10 years, life cover was £7.26 a month at 35 and £26.78 at 55, and life with critical illness £32.56 and £158.57.

That is a broker’s example, not a quote. Drewberry’s example ↗

It can be.

HMRC’s manual says premiums are deductible only if the sole purpose is meeting a loss of trading income and, for life cover, the policy is term insurance with no other benefits.

Where the premiums were deductible, a payout is taxed as trading income.

Whether a policy meets the test is a question of fact, so check with your accountant. HMRC BIM45525 ↗

Businesses that depend on particular people: founders, directors, top salespeople, or staff with skills or client relationships that would be hard to replace.

Legal & General says the business must be able to show it would lose profits without the person.

Whether a policy suits your business is a question for an FCA-authorised adviser. Legal & General ↗

Key person insurance pays the business when someone it depends on can no longer contribute.

Shareholder protection keeps ownership with the people running the business: a cross option agreement gives the surviving shareholders the option to buy the shares from the personal representatives, and life cover funds the purchase.

They answer different needs, and a business can hold both. Royal London ↗

Insurers publish the ceilings their underwriters work to.

Legal & General’s adviser guide gives a multiple of earnings, often up to 10 times for life cover, up to 5 times the net profit attributable to the person, or the amount of a loan to be repaid.

Royal London caps total life cover at the greater of 10 times the salary package or 5 times average net profit.

The calculator works through each method. Legal & General guide ↗

Yes, if it is chosen.

Legal & General describes its key person cover as life insurance, with critical illness cover if selected.

Under the ABI’s minimum standards, a policy called critical illness must cover cancer, heart attack and stroke.

Limits are lower: Legal & General’s oldest entry age is 67 with critical illness against 77 for life cover alone. ABI minimum standards ↗

The business owns the policy, so the business decides what happens to it.

Whether it can be cancelled, kept, moved to a new key person or converted to personal cover depends on the insurer’s terms, so read the policy documents or ask the insurer before you stop paying.

For tax, HMRC expects the term not to run beyond the person’s usefulness to the company. How to cancel key person insurance ↗