Key Person Insurance

Does your business success depend on a key staff member?

In many businesses, especially small to medium size companies, success depends upon a few top individuals that posses special talent, skills and experience. These employees are critical to the long term performance of the company. They make operational decisions, negotiate credit with financial institutions and are responsible for marketing and sales activities.rounded1

The untimely death or disability of one of your key people could have a devastating impact on the business. Key man insurance provides peace of mind to business owners and shareholders alike knowing that the business can continue operations in the event of the loss of a key employee.

Below are just a few of the important reasons to utilize key person insurance:

  • Key person life insurance protection reimburses businesses to offset losses caused by the death of the key employee.
  • Policies help bridge the gap caused by lost revenue or increased expenses due to the loss of a key person.
  • Gives a business cash to cover costs associated with recruiting a new employee and continuing operations at a time when cash is needed most.
  • Many business owners also use key person life insurance as collateral for risks associated with expansion and/or debt financing, as required by lending institutions.

Key Person Disability Insurance

Illness or injury, whether your own, a business partner’s or an employee’s, can disrupt your business at multiple levels. Below are just a few of the important reasons to utilize buyout life insurance as part of a buy/sell agreement.

  • Key person disability buyout insurance helps fund the sale of the disabled owner’s share of the business.
  • Disability overhead expense insurance pays for fixed business overhead expenses including, but not limited to, payroll, rent and utilities, which can be covered while a disabled owner is recovering.
  • Policies reimburse the owner for normal and customary expenses incurred in running the business, while offering business owners flexibility in meeting seasonal and fluctuating expenses.
  • Assures employees that in the event of the owner’s disability, the business can continue to operate and their jobs will be secure.