What are the tax benefits of Keyman insurance?

The premium paid by the company is treated as a business expense under Section 37(1). However, the claim amount received by the company is taxable as business income under Section 28(vi).

Who is eligible for Keyman insurance?

Any employee whose death would lead to a significant financial loss for the company—founders, directors, top salespeople, or technical experts—is eligible.

Can a startup buy Keyman insurance?

Yes, startups often buy Keyman insurance to protect the business against the loss of a founder, which is frequently a requirement from Venture Capitalists during funding rounds.

Key Man Insurance Calculator

Determine the sum assured needed to protect your business from the loss of a crucial employee.

Quick Summary: Key Man Insurance Calculator

Keyman insurance cover is usually calculated as 10 times the key person's annual package, or 3 times the average gross profit of the company over 3 years. The higher of the two is recommended to cover revenue loss, hiring costs, and debt obligations that may be called in if the key person is lost.

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Regulatory Disclaimer

Last verified May 2026

Statutory Disclosure

Nature:Calculator platform and is NOT a SEBI-registered Investment Adviser. All calculations are indicative.

Risk:"Investments in securities market are subject to market risks. Read all related documents carefully before investing."

Consult a SEBI-registered IA or CA for personalised advice.

9 out of 10 traders in F&O incurred net losses (SEBI 2023). Tax estimates based on IT Act 2025. Trezoriq is not liable for financial decisions based on results.