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Key Person Insurance


What is Key Person Insurance?

Key Person Insurance, a.k.a. Key Man Insurance, Key Woman Insurance, or Key Employee Insurance is coverage that protects a company or business from the untimely death of an owner, executive, or top salesperson. The company owns the policy, pays the premiums, and is the beneficiary in the event a key person dies. Key Person Insurance can be a permanent policy or a term policy.

Why do businesses need a Key Person Insurance Plan?

Most small to medium size businesses depend on the talents and expertise of key individuals. If the unexpected death of a key individual would cripple your business either financially or with daily operations, a Key Person Insurance plan would be a wise investment. Key Person Insurance is inexpensive and a great way to protect your business.

How to determine the amount of Key Person Insurance?

Many factors come into play when trying to determine the value of a Key Person. Costs associated with the key person’s salary, replacement costs, and lost revenue need to be taken into consideration. The death benefit should be enough to allow the business to continue functioning without major disruption if a tragic loss were to occur.