Business protection calculator

This calculator will help you to decide on an appropriate amount of cover for a key person.

There are many ways of arriving at the value of a key person, and each situation has to be viewed individually.

You should consider the effect of the loss of the key person on the business and take into account any contributions they make to profit and estimate replacement costs.

 

Reason for cover

Amount of cover

Key person 1

Key person 2

Key person 3

Loan cover

Bank loans

Proportion (£) of
bank loans
attributable to key
person

OR

Amount of loan where full cover is
needed on key
person

Proportion of
overdraft attributable
to key person

Owner's loan

Director, partner or
member
loan/current
accounts (in full)

Other loans /
indebtedness

Key person cover*

Contribution
to profit

Contribution of key
person to the gross
profit of the
business multiplied
by years to recovery

OR

Contribution of key
person to the net
profit of the
business multiplied
by years to recovery

Replacement
costs

Agency fees

Salary/ pension/ bonus

Car lease

Other - relocation,
training

Other costs

eg. SIPP /SSAS
liquidity


Total key person and loan cover

Key Person 1
Key Person 2
Key Person 3
*Total key person cover (excluding loans) should not exceed 2 X average gross profit or 5 X average net profit. NOTE: Figures subject to acceptance following financial underwriting.
Last updated: 22 Oct 2015

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London EC3V 0RL.