Keyman Insurance and Emiliano Sala

You’ve undoubtedly heard of the tragic story of Emiliano Sala, the 28 year old Artintinian footballer who was sadly lost in a light aeroplane accident earlier this year. Awful story, such a young life cut short by catastrophe.

Emiliano was sold to Cardiff City, a Premiership football team here in the UK, for £15 Million and the deal involved instalments of cash over time. Quite normal.

His death occurred two days after the transfer completed and Nantes, his former club, were criticised for making their first installment demand whilst his body was being searched for in the English Channel. They had a right to do so, but their timing was a bit awry.

So what does this have to do with mortgages and protection? Lots actually when we refer to Key Person Insurance. Let me explain.

Key Person Insurance is a commercial insurance policy taken out by a company on the life of an employee, whose death would cause financial calamity to the firm. Typically the Sales Director, IT Director, is chosen as the life assured, but in Cardiff City’s position, it should have been Emiliano Sala.

The sum assured would have been enough to compensate them for the loss of the star player, the impact his death would have had on the club.

Whether Cardiff City has this insurance or not, I don’t know, but if they did not, they’re inevitably going to be out of pocket because they have to stick to the purchase contract and pay Nantes their £15 million.

Key Person insurance is a specialist contract most mortgage advisers won’t get involved in, but you do need to know about Insurable Interest. This principle allows third parties to insure someone else's life and receive the payout if they were to die. Other incidents where Insurable Interest exists:

  • Spouse to spouse
  • Joint borrowers
  • Partners in a business

A young life cut short, friends and family members distraught, you can’t imagine how people are feeling. However, you can envisage the Cardiff City Boardroom atmosphere when the Finance Director reveals he hadn’t gotten round to arranging Key Person Insurance.

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