Key person insurance costs

The loss of a key individual can have a big financial impact on a company, and key person insurance – sometimes known as ‘key man’ insurance – is a way of protecting against this. But how much will it cost your business to take out key person insurance? We’ll explore premiums and more in this guide.

What is key person insurance?

In every business, it’s hard to imagine life without key personnel. Key person insurance, like our Key Person Protection, is designed to protect a company if an indispensable member of the team passes away or experiences a terminal or critical illness (if you add critical illness cover for an extra cost) during the policy term.

The key man or woman you insure isn’t necessarily the CEO or founder, but anyone whose absence could financially affect the running of the company, such as an office manager, IT staff or exceptional talent.

You can take out key person protection to cover the life of the individual – with a payout upon a valid claim – or you can add Critical Illness Cover or Critical Illness Extra which (if valid) would pay out upon a valid claim on diagnosis of a specified critical illness during the length of policy.

How much does ‘key man’ insurance cost?

The cost of key person insurance will depend on your specific requirements. But as we’ll explore later, in reality there are lots of factors that insurers take into account – as well as things you’ll need to consider as a business – before you can estimate the cost of ‘key man’ insurance for certain.

What is the average cost of key person insurance?

It’s important to note that there is no one-size-fits-all when it comes to key person insurance premiums, and the underwriting process and your required cover amount will ultimately determine how much you pay for key person protection.

How are key person insurance premiums calculated?

There are various factors that affect the cost of key person insurance. Many of these relate to who it is you’re insuring; for example, premiums will be affected by the age and health status (and health history) of the key person, including whether they’ve smoked now or in the past. An insurer will also take into account whether the key person takes part in hazardous hobbies or activities. But the cost of ‘key man’ insurance is also influenced by policy factors, such as if you add critical illness cover, and the length of policy you take out.

How to find out more about Key Person Protection with Legal & General

Key Person Protection can give you the reassurance you need to plan your business’s future with confidence. When you contact Legal & General to find out more, you can speak to a qualified financial adviser who will assess your needs and make a personal recommendation and provide a no-obligation quotation.

You can call us on 0800 197 9208 from 9am to 5pm Monday to Friday (note – we may record and monitor calls). You can also email us at to arrange a call back or book an appointment to speak to us.