Key Man Life Insurance
Apr 1, 2009 Life Insurance 101, Types of Life Insurance
Key Man Life Insurance is life insurance that is purchased on the life of an employee to protect against the untimely death of that employee. The policy is owned by and premiums are paid by the company. The company is also the beneficiary. The company will receive the face amount of the policy if the key man dies.
Some reasons why you should consider buying Key Man Life Insurance:
- The death of one of your best sales executives would result in lost revenue on a long-term basis.
- You may have a key executive that is responsible for all product development and that person’s loss could cause the company to lose their competitive advantage.
- The loss of key person like an attorney or doctor which generates a high percentage of revenue would be lost and not easily replaced, while expenses remain unchanged.
These are just some examples of key man life insurance. If you have an employee for which the loss of that employee would result in a significant economic loss, you should consider key man life insurance.
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