What factors affect the cost of key person insurance premiums?

Key person insurance premium costs in Australia are influenced by numerous factors, similar to personal life insurance underwriting. The key person's age is a primary factor - older key persons typically attract higher premiums due to increased health risks. Their health status, medical history, and any pre-existing conditions significantly impact pricing. Smokers pay substantially higher premiums than non-smokers. The occupation and duties of the key person matter - high-risk roles command higher premiums. The coverage amount directly affects cost - higher sum insured means higher premiums. The type of coverage chosen (death only, or including TPD and trauma) impacts pricing, with comprehensive policies costing more. The policy structure matters - whether it's for revenue or capital purposes, and whether benefits are lump sum or monthly income replacement. The number of key persons covered affects total premiums. The waiting period and benefit period for disability coverage influence costs. The business's industry and risk profile may also be considered. Businesses can reduce premiums by choosing appropriate coverage levels, avoiding over-insurance, selecting longer waiting periods where viable, and encouraging key persons to maintain healthy lifestyles.