Business Insurance:
Protect against the unexpected loss of a critical contributor
Every business relies on its employees to function and thrive, but some individuals play what can fairly be called a critical role in a company’s success. These “key persons” possess unique skills, experience, or relationships that can be critical to the day-to-day operations and future prospects of the business.
A key person insurance policy, also known as keyman or key woman insurance policy, is a financial tool designed to safeguard a business in the event of the death or disability of such a crucial employee.
The death benefit provides much-needed capital to the business during a challenging period. This money can be used to cover various expenses, including:
Losing a key person can disrupt operations and potentially jeopardize the future of the company. Key person insurance helps mitigate this risk by providing resources to ensure a smoother transition.
Some lenders might require businesses to have key person insurance in place as a condition for securing financing.
Entrepreneurs and owners are often the lifeblood of their startups. Their absence can have a crippling effect.
If a company depends heavily on an employee with unique expertise or critical industry relationships, their loss can be immensely damaging.
High-level managers responsible for driving sales, managing large projects, or possessing vital industry knowledge can be irreplaceable in the short term.
Premiums are based on the employee's age, health, and the amount of coverage.
Consult a tax advisor to understand the tax treatment of premiums and payouts.
Not every employee qualifies. Analyze which individuals are critical to the business's success and difficult to replace.
Key person insurance offers a valuable safety net for businesses. By mitigating the financial impact of losing a vital employee, it helps ensure the company's stability and increases its chances of weathering unexpected circumstances.
Your next step is to have a conversation with an expert, to determine your specific needs and identify solutions that meet them. We’re ready to help —
no obligations, no fees, no pressure.
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