23 June 2016
Keyman Insurance policies are usually owned by the business and the aim is to compensate the business for losses incurred with the loss of a key income generator and facilitate business continuity. Key person insurance does not indemnify the actual losses incurred but compensates with a fixed monetary sum as specified on the insurance policy.
23 June 2016
if keyman insurance indemnify business against any losses as per my question , if a sole proprietor take key men insurance policy in his name ....then how it's possible business is getting indemnify if something happened to owner or sole proprietor in concern
23 June 2016
NO, not eligible per IT Act definition. Section 10(10D), which defined the keyman insurance policy as follows: For the purposes of this clause, “Keyman insurance policy” means a life insurance policy taken by a person on the life of another person who is or was the employee of the first-mentioned person or is or was connected in any manner whatsoever with the business of the first mentioned person. Therefore, being proprietor of the business he can not take keyman insurance policy for himself and to claim tax benefits as well-per my opinion.
23 June 2016
Thanks and appreciate ur effort of answering my query even I share the same opinion that a sole proprietor can't take keyman insurance policy..
CAclubindia
