Most maturing small businesses have a core group of key individuals who are essential to the profitable operation of the company. Unfortunately, one of these key people's premature death or disability could create negative impacts. Key person insurance is designed to protect your business by giving you the financial resources to regroup and get back on track.

Key person life insurance is a type of life insurance policy that provides a death benefit to a business if its owner or another significant employee passes away.

There’s no set formula for deciding the monetary value of your key person insurance. However, you may want to start by considering the financial effects a key employee’s death would have on your company.

For instance, if you’re a sole proprietor buying key person insurance on yourself, you may want enough coverage to help your heirs close your business and pay off any company debts. On the other hand, suppose you own a larger company and are insuring a key employee. In that case, you may need enough coverage to replace that person’s sales income, for example, or to provide a financial cushion while you search for the employee’s replacement.

How your policy is structured may depend on your company’s legal structure. Typically, the company pays premiums for the key person policy, owns it, and is the beneficiary. In writing, the key employee must consent to your company owning the policy.

Suppose you have key people who are irreplaceable or whose contributions are so crucial that without them, your business might fail. In that case, key person insurance can provide the money necessary to recover and rebuild in the event of their premature death. Connect with us to know more!

It might be time to switch insurers whenever the service that your existing insurer provides doesn’t meet your needs. For example, if you have a poor claims experience or an unexplained rate increase, it might be time to consider other options

If you cancel a previous policy before a new policy is effective, you could run into some serious financial problems.

Contact us today to help you with multiple options to choose from.