Key Person Insurance
Key Person Insurance is a specialized life insurance policy designed to protect your business against the financial impact of losing a critical team member. This insurance provides your company with a financial cushion, ensuring continuity and stability during a challenging transition period.
Why Your Business Needs Key Person Insurance​
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​Every business has individuals whose skills, experience, or leadership are vital to its success. Whether it's the CEO, a top salesperson, or a key technical expert, their absence could lead to significant disruptions. Key Person Insurance helps safeguard your business by covering the financial losses associated with their loss, allowing you to focus on finding a replacement without the immediate financial strain.
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Benefits of Key Person Insurance​
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Business Continuity: Ensures your company can continue operations smoothly without financial instability.
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Loan Security: Lenders often require key person insurance as collateral for business loans, reducing the risk to your business.
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Attracting Investors: Demonstrates to potential investors that you have a plan in place to handle unexpected events, making your business a more secure investment.
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Protecting Business Value: Helps maintain the value of your business during a transition period, preventing a sudden drop in profitability.
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How Key Person Insurance Works​
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The business takes out a life insurance policy on the key individual, paying the premiums and naming itself as the beneficiary. If the insured person passes away or becomes incapacitated, the company receives a lump sum payout. This payout can be used to cover lost income, recruit and train a replacement, or manage any other expenses that arise due to the loss.