Who are the key people?
A key person is someone who has a direct impact on the success of your business. Their absence would threaten the survival of your business and make it very difficult or expensive to find a replacement. A key person can be the business owner or an employee.
Key Person Life Insurance
Key person life insurance is a type of life insurance that a company takes out on the life of a key person. As the company is the beneficiary of the policy, if the employee dies, the company receives the death benefit. This death benefit can be used to cover a variety of expenses, such as:
Covering the salaries of key employees, hiring and training new staff, paying down debt, investing in the business, and providing financial security for the families of key employees.
Key Person Disability Insurance
Companies can purchase key person disability insurance for their important employees. The company is the beneficiary of the insurance, so if an employee becomes disabled, the company receives a monthly benefit. This benefit can be used to cover the costs of supplementing the salaries of key employees, such as hiring and training new employees and paying overtime for existing employees.
The benefits of key person life insurance and disability insurance
Key person life and disability insurance offers many benefits to businesses, including:
Financial Security: Key Person Insurance helps businesses maintain financial stability in the event of the death or disability of a key employee. Business Continuity: Key Person Insurance helps businesses continue to operate after losing a key employee. Peace of Mind: Key Person Insurance gives business owners and managers peace of mind knowing their business is financially protected in the event of the death or disability of a key employee.
Who needs key person life and disability insurance?
Businesses that rely heavily on a small number of key employees should consider purchasing life and/or disability insurance for their key employees. This is especially important for small businesses and start-ups, where the loss of a key employee can be especially devastating.
How much life and disability insurance do you need for key people?
The amount of key person life and disability insurance you need will depend on a variety of factors, including the key employee’s salary, benefits and the financial impact that the death or disability of the key person would have on your business.
Key person life and disability insurance can be a valuable tool for businesses of all sizes. By protecting your business against the financial losses that may result from the death or disability of a key person, your business can ensure its continued success.
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