Key Person Insurance
Many businesses have a handful of employees who are vital to the survival and success of the organization. If this sounds like your business, consider purchasing key person life insurance to reduce the backlash in the event that one of these key employees leaves prematurely.
What Is Key Person Insurance?
One type of life insurance often purchased by businesses is key person insurance. A company may buy this unique coverage for a “key person” in its business. This individual could be the business owner, a top executive or another person who is instrumental to the company and its livelihood. Key person insurance provides financial compensation to the company if the key person dies unexpectedly or becomes disabled. The insurance payout can keep the business running until it can replace the executive or close the company.
Unlike a personal insurance policy, the company is the beneficiary of a key person insurance policy. They also pay the premiums and receive the policy’s death benefit. For some companies, especially smaller businesses, this may be a worthwhile investment since a key person’s death, disablement or departure could devastate their company’s future.
How to Get Key Person Insurance
We can explore key person insurance and other commercial insurance solutions to ensure your business has the safeguards in place if something unfortunate happens to an essential team member. Call James L. Smith Insurance Agency to learn more about what this coverage can do for your business.