dear friend pls let me know about the procedure

This query is : Resolved

ANIL A MALAVADE (Querist)
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01 February 2010 Hi
pls any body inform me whether key man insuarance paid by the company is allowable expenditure or ? let me know detial information about key man insuarance

haridhayalan

haridhayalan (Expert)
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01 February 2010 yes. it can be allowed expenditure. key man insurance policy will be taken on key person of the company. Key Man is the life Insurance, taken by a Company, on the life of an Employee Director whose services have significant effect on the profitability of the company and whose premature death will adversely effect its profitability, stability and progress. There can be even more than one Key man in a company.

Objective

The object of key man Insurance is to protect the company from the adverse financial effect by the Key Employee or Key Directorâ€™s death by making funds available to the company in his absence. The companyâ€™s progress and profit, usually depends upon the vital decision or technical expertised skill, knowledge, entrepreneurial vision of its Key Director or Key Employee, particularly in this competitive Globalised marketing Environment.

Todayâ€™s companyâ€™s expansion diversification, and setting up policy depends upon its Far sighted Vision, decision, technical know-how of the Key Director and Key Employee and thatâ€™s required to be secured by purchasing Key-man Insurance for making funds available for promoting, recruiting in the absence of Key-man includes key-woman. This policy is specially purchased by the company (both Pvt. and Pub Ltd. Co.) for the life of its single most important Key person.