insurance for small business owners and the self-employed

Key Person Life Insurance

key-person insurance

Financial Plan

Almost every business has key employees who are essential to its overall success, and if so, should carefully consider purchasing Key Person Life Insurance. Key Employee Life Insurance is designed to protect a business from financial loss at the death of a key employee. This employee could be the owner of the business or an employee whose services or knowledge are crucial to the business and costly to replace.

What is Key Person Life Insurance?

A Key Person Life Insurance policy protects against losses as a result of the death of a key person at the business. The policy’s death benefit provides capital to help the company absorb the absence of the key person. Unlike other sources of capital -such as a sinking fund, a loan, or company earnings- life insurance provides liquidity precisely when the need arises: upon the death of a key person. Further, disability reiders are available that can waive premium payments in the event of the insured’s total inability to work due to disability. Key Person Life Insurance is life insurance purchased by a business on an owner or employee whose services contribute substantially to the success of the business. The insurance is owned by and payable to the business. The insured owner or employee is a valuable asset that is insured by the firm, in the same manner that the building and equipment of the business is insured against physical damage.

Key Man or Key Person Life Insurance is Designed to:

key-person insurance

You must choose one: The risk, or the insurance

  • Provide cash to offset the loss of profits due to the death of a key employee.
  • Provide funds to recruit and train a qualified replacement.
  • Protect the company’s credit position by reassuring banks and other creditors that the company will have the resources to honor its obligations, even if it loses a key employee.
  • Provide a financial hedge against a loss in business value.
  • It is intended to safeguard the continuity of the business.

And…

  • If the employee is also part owner in the business, death benefit proceeds can be used to buy the employee’s interest from th eemployee’s heirs or estate.
  • The employer can be selective as to which employees to cover.
  • The employer may also use Key-Person Insurance as a non-qualified deferred compensation plan. At retirement, the employer may take withdrawals and loans from the policy’s cash value ro provide taxable retirement income to the employee.

For More Details Review Either Or Both Of The Following:

If You Have One Or More Key Employees…

key person life insurance

Key Person Life Insurance

and would like us to help you evaluate and identify which life policy, or policies, best meet your specific situation;

  • Call Our (Local) Number: (786) 353-2528
  • Or, our Toll Free Number: (888) 950-8376
  • Or click on CONTACT US.