Key person protection is a type of business insurance where a company takes out a life insurance policy on a key employee, such as a CEO or top executive.
Why is Option D Correct?
An insurable interest must exist → The company must demonstrate financial loss if the key person dies or becomes incapacitated.
The policy protects against lost revenue, recruitment costs, and operational disruption.
Why Not Other Options?
A (Ever-increasing premiums) → Premiums may increase, but this is not a requirement.
B (Protection against staff leaving) → Key person insurance does not cover resignations.
C (Undefined sum) → The insured amount is calculated based on business impact.
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