Most companies have a person whose position is vital to the success of the business. A key person may be an owner, partner, or employee and without that person, your business would suffer serious consequences such as loss of credit, loss of key accounts, lost earnings, high replacement costs or maybe diminished confidence in the remaining employees.
Why life insurance?
Whether a small family owned company or a multi-billion dollar corporation, the death of a key person can drastically cripple a business quickly. If you have life insurance on those key people, you can name the beneficiary as the business and use the death proceeds to fund all lost earnings, replacement costs, etc. If a key person were to become disabled or left the company, the policies cash value could be used as a source of income for the company to find a replacement. If the key person were to die, the proceeds can also fund buy out plans for remaining spouses or partners; protecting from a forced sale or loss of control in your business. Life insurance is cost efficient, guaranteed, and generally tax free.
How does key person insurance work? Continue reading....