Key Person Insurance
Could your Business Survive the Loss of a Key Person?
Your employees are your most valuable resource. Key person insurance policies are generally owned by a company and covers key employees who are responsible for the majority of profits, or have a unique and hard-to-replace skill set that is vital to the organization. You can take out a key person insurance policy on the life or health of any employee whose knowledge, work, or overall contribution is considered particularly valuable to the company. You would do this to offset the costs (e.g. hiring temporary help or recruiting a successor) and losses (e.g. a decreased ability to transact business until successors are trained) which you are likely to suffer in the event of the loss of key employees or should an employee become totally disabled.
6 questions you must ask yourself as an employer
- Will the loss of a key person impact my company financially?
- Will it affect profits? If so, for how long?
- What is the cost to replace the key person?
- Will I lose major accounts or relationships?
- Is my key person a center of influence on other employees?
- Is my company’s credit in jeopardy?
Dealing with the unexpected is part of doing business. If a key person is the most significant contributor to your business, your company may not be able to continue operating without that person. Key Person Insurance can help you withstand the loss so you can keep your business afloat.
To learn more about Key Person Insurance, we invite you to reach out to us.