Key Person Insurance for Businesses with Overseas Subsidiaries and Hub Structures
When a business operates across multiple countries — perhaps with a UK or Cyprus holding company, regional hubs in Dubai or Singapore, and trading subsidiaries in emerging markets — the question of key person insurance becomes considerably more complex than it is for a domestic firm. Which entity insures which individual? In which jurisdiction should the policy sit? What happens when the key person relocates between entities? These questions do not have simple answers, but addressing them systematically can protect both corporate value and lending relationships across an entire group.
This guide examines how internationally operating businesses — from family-owned trading groups to private equity-backed multinationals — should approach key person insurance when their critical people move across borders.
As of 2026, key person insurance is available from a range of international carriers in most major jurisdictions. Tax treatment, insurable interest rules, and disclosure obligations vary significantly by country. Professional advice from a qualified adviser in each relevant jurisdiction is essential before placing cover.
What Is Key Person Insurance in a Cross-Border Context?
Key person insurance (also called keyman insurance) is a life or critical illness policy taken out by a business on the life of an individual whose skills, relationships, or knowledge are so central to the business that their loss — through death, serious illness, or incapacity — would materially damage its trading position, creditworthiness, or ability to fulfil contracts.
In a purely domestic context, the employer company is the policy owner and premium payer, the key person is the life assured, and a claim proceeds are paid to the company as compensation for the commercial loss.
In an international group, the picture fragments:
- A founder may sit on the board of five entities across three jurisdictions
- A regional managing director may technically be employed by a local subsidiary but be contractually critical to the holding company's lending covenants
- A technical specialist may spend 60% of their time seconded to a joint venture partner
Each scenario requires a different placement approach.
Why International Group Structures Complicate Key Person Cover
1. Insurable Interest
Every jurisdiction that permits key person insurance requires the proposer (the business) to demonstrate an insurable interest in the key person — a genuine financial interest in that person remaining alive and well. In the UK, insurable interest for companies is generally established by demonstrating economic dependence. In the UAE, requirements differ. In some Asian jurisdictions, corporate insurable interest is not formally codified in insurance law.
When a holding company in one country wants to insure the life of a director whose contract of employment sits with a subsidiary in another country, the insurable interest chain must be explicitly established and documented — typically through board resolutions, employment contracts, shareholder agreements, and a formal assessment of financial impact.
2. The Policy Ownership Question
In an international group, the choice of policy owner (the entity that pays premiums and receives claims proceeds) has significant implications:
Option A — The employing subsidiary holds the policy. Simple insurable interest. However, if the key person is critical to the group as a whole — not just the local subsidiary — the claim proceeds may not reach the entities that suffer the most economic damage.
Option B — The holding company holds the policy. Captures group-level value. Requires careful insurable interest analysis. Premium payments from the holding company to an overseas insurer may trigger withholding tax or transfer pricing queries in some jurisdictions.
Option C — A coordinated hub structure. For large groups, a regional or global insurance programme placed through an international carrier, with all entities listed as named beneficiaries proportionate to their economic exposure, can be more efficient.
3. The Individual's Tax Residency
Key person insurance premiums are generally not deductible in the UK against corporation tax when the policy is for the company's benefit (HMRC's position is that it is capital in nature). The position in other jurisdictions varies. In the UAE, there is no corporation tax at the federal level on most activities (a 9% corporate tax was introduced in 2023 for taxable persons above AED 375,000 profits), so the deductibility question has a different character. Wherever the premium payer sits, local tax advice must be obtained.
Calculating the Sum Assured in a Multi-Jurisdiction Business
Quantifying the financial exposure to the loss of a key person is the most important step in any key person programme. In international businesses, three methods are commonly applied:
Revenue/Profit Contribution Method
Estimate the proportion of group revenue or EBITDA directly attributable to the key person's involvement — through client relationships, operational expertise, or regulatory licences held personally. Multiply by a recovery period (typically two to five years). This is the most defensible basis for larger sums assured.
Loan Covenant Method
Where a key person is named in bank lending covenants as a condition of credit facilities, the key person cover should be sized to equal the outstanding loan balances (or the portions that would be recalled on the key person's departure). Lenders frequently require assignment of key person policies as security.
Replacement Cost Method
Estimate the all-in cost of recruiting, relocating, and up-skilling a successor, including lost revenue during a transition period of 12 to 24 months. In international businesses, this often understates the true cost — a founder's client relationships in the Gulf, for example, may be irreplaceable rather than simply expensive to replicate.
Most advisers recommend cross-checking all three methods and using the highest defensible figure.
Structuring Key Person Cover for Common International Group Models
The UK Holdco / Middle East OpCo Structure
A common structure for internationally mobile entrepreneurs involves a UK (or BVI/Cayman) holding company with trading operations in the UAE, Saudi Arabia, or Qatar. The founder is typically resident in the UAE.
Recommended approach: Place the policy through an international life assurance carrier domiciled in a neutral jurisdiction (Isle of Man, Cayman, or Bermuda are common for large sums). The holding company is the policy owner and premium payer. The key person (UAE resident) is the life assured. The carrier should be one that can accept non-UK risks and has underwriting capacity for large sums assured — typically USD 10 million to USD 50 million or above for HNW founders.
Insurable interest documentation: board resolution of holdco confirming economic dependence; group financial accounts demonstrating revenue concentration; any lending agreements naming the individual.
The Cyprus Holding / European Operating Structure
Cyprus is a popular holding jurisdiction within the EU, with an extensive treaty network. Where the key person is a Cyprus-resident director, local carriers can offer key person life cover. However, international carriers may offer larger capacity and more competitive underwriting for high-risk occupations or complex medical histories.
The Singapore Regional Hub
Singapore-based businesses often structure key person cover through Singapore-licensed insurers (many global names operate there) or through an offshore policy accepted in Singapore. MAS regulation applies. The key person regime in Singapore is well-established; premiums paid by a company for key person insurance are generally deductible against Singapore corporate income tax where the sole purpose is indemnifying the company for financial loss — a distinction HMRC explicitly does not make.
Critical Illness Cover as Part of a Key Person Programme
A key person may not die — but a serious illness such as a cancer diagnosis, heart attack, or stroke can remove them from the business for 12 months or longer. Many businesses therefore place both a life (death benefit) and critical illness (living benefit) key person policy.
International carriers can write both covers under a single policy or as separate policies issued simultaneously. Where the key person is aged under 45 and the primary risk is incapacity rather than death, a standalone critical illness policy — or a policy with a critical illness acceleration rider — may be more cost-effective than a pure life policy.
Conditions covered, exclusions, and definitions of critical illness vary significantly between carriers and jurisdictions. The ABI Model Definitions used in the UK are not universal. Verify the policy wording against the specific conditions relevant to your industry and workforce geography.
Premium and Policy Management for International Groups
Currency
Key person policies for international groups should be denominated in the currency of the economic loss — typically USD, GBP, EUR, or AED. A policy denominated in a weak local currency that does not match the group's functional currency provides inadequate protection.
Premium Review
Policies placed on a reviewable basis (where the insurer can adjust premiums at set intervals) create uncertainty for long-term planning. Guaranteed premium policies cost more initially but remove this risk — particularly important where the key person is difficult to re-underwrite (age, medical history, or occupational risk).
Policy Portability
If the key person relocates — from Dubai to London, for example — does the policy remain valid? Most international policies written through offshore carriers travel with the individual, subject to the carrier accepting the new country of residence. Domestically placed policies frequently lapse or become unenforceable if the life assured relocates outside the issuing jurisdiction. Always confirm portability in advance.
Assignment to Lenders
Where a business bank or private debt provider has made key person insurance a condition of lending, the policy must be formally assigned to the lender. The assignment should be documented, the insurer notified, and a deed of assignment executed. On the death or critical illness of the key person, the lender is paid first (up to the outstanding loan balance), with any surplus going to the policy owner.
Ensure that the lender's requirements are reviewed at each policy anniversary — outstanding loan balances fall over time, and the assignment terms should be updated if the business refinances.
Key Questions to Ask When Placing International Key Person Cover
- Which entity has the clearest insurable interest — is it the employing entity, the holding company, or a creditor?
- Does the carrier have experience underwriting non-domiciled individuals or those with complex residency histories?
- Is the policy portable if the key person relocates?
- Is the sum assured calculated on a defensible, documented basis?
- Are there any notification requirements — to regulators, shareholders, or lenders — triggered by placing the policy?
- How are claims paid if the key person dies outside the policy's home jurisdiction?
- Is the critical illness definition consistent with the key person's most plausible risk (occupation, geography, age)?
How Global Investments Can Help
Global Investments works with internationally operating businesses, family offices, and entrepreneur-led groups to design and place key person insurance programmes appropriate for complex cross-border structures. Our advisers have direct experience with holding company and subsidiary arrangements spanning the UK, Cyprus, UAE, and multiple Asian and African jurisdictions.
We carry out a structured financial impact analysis to determine appropriate sum assured levels, identify the most tax-efficient policy ownership structure for your group, and source quotations from international carriers with the capacity and geographic reach to underwrite your specific risk.
We also co-ordinate with your corporate lawyers and lending banks to ensure insurable interest documentation and lender assignments are correctly executed — a step frequently overlooked in international placements.
If your business has key people operating across multiple countries and you do not yet have formal key person cover in place, or if existing policies were placed domestically and have not been reviewed since the business expanded internationally, contact Global Investments to arrange a review.
Investments and insurance products can fall in value. Tax treatment depends on individual circumstances and may change. This guide is for information only and does not constitute regulated advice. Always seek advice from a qualified professional in the relevant jurisdiction.
This guide is for general information only and does not constitute financial or insurance advice. Policy terms, premium rates, and insurer eligibility criteria change — always verify current terms with a qualified independent adviser before taking out any policy.