He or she directly or even indirectly contributes to the success of the company. Usually the owner, managing director. It can be a valuable staff that perform very well and the skill not easily replaceable.
From tax point of view:-
- Premium paid is not deductible expenses, if
- There is a cash value element, i.e. Investment-Linked or Whole-Life or Endowment
- The Company is a CONTROLLED COMPANY as defined under Section 139 of the Income Tax Act 1967, most bosses of SME falls into this category.
- Proceeds goes to the keyman or his family members
- Premium paid is deductible expenses
- There are no cash value i.e. term life or personal accident
- The Life Insured is not the boss or director of a Controlled Company or The company is not a controlled company.
- Proceeds goes to the Company.
IF the premium is a deductible expense, then the Claim (in term of RM100,000 or RM5,000,000) will be a taxable income.
You figure out if it is worthwhile to claim the premium as tax deductible expense?
Not all life insurance agent understand all this. Well, some bad one may just ignore in order to sell. There are always good guys and bad guys in any company, any industry, right?