For a key person protection policy, a company will:

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.

???? Reference: FCA Business Protection Regulations, CISI Wealth & Investment Management.