Protecting You and Your Business
Key Person Life Insurance
In Case the Unthinkable Happens
In business, every employee is important – but some employees are essential. Whether it’s their reputation, name, skillset, or clients they bring into the company, the loss of certain key employees can have a devastating impact on an organization.
Key Person Life Insurance is a type of life insurance policy that provides a death benefit to a business if its owner or another significant employee passes away.
Key Person Life Insurance FAQ
Key Person Life Insurance is for employees whose absence will be a financial burden to the business and will be difficult and costly to replace. The policy provides funds that can help ensure business continuity if a key employee dies or becomes disabled (an additional disability rider may be required).
Key Person Life Insurance is an affordable way to protect the long-term health of your business. It is easily acquired and offers priceless peace of mind while giving your company credibility in the eyes of potential lenders and investors.
Key Person Life Insurance is used for a wide range of needs, but some of the most common purposes include:
- Pay expenses while the company stabilizes
- Provide funds for recruiting and/or training a replacement key employee
- Secure business loans for growth and expansion
- Pay off debts
The main consideration will be the amount of coverage needed. You may want to start by considering the financial effects a key employee’s death would have on your company.
The business owns the policy and pays the premiums, so it is a form of company-owned life insurance, or COLI. When the insured dies or becomes disabled, the business serves as the beneficiary and receives the death (or disability) benefit.
Life insurance companies require the written consent of the key employee being insured.