Key Person Life Insurance – Protects Key Business Assets
January 29th, 2009
Having your own business can be a complex series of ups and downs and provide you with a wide range of emotional situations. This becomes even more of a dynamic when you have a partner in the business. You have to be aware of what would happen if one of the key members of your staff (including you or your partner) were taken out of the picture.
Key person life insurance can provide coverage that will ensure protection for any business, regardless of size or complexity. Taking away key personnel from a small business can be every bit as devastating as a large corporation losing lead persons. Having a key person life insurance policy in place will allow for an infusion of cash in the event that the key person, covered under the policy, dies.
With key person coverage, the day-to-day operations of the business will be minimally impacted by the sudden loss of this person’s expertise and experience. The business can then use this money to immediately replace the key person to allow the business to run efficiently again as soon as possible. This makes excellent business sense, especially for those businesses that have stocks and shares and that have to answer to others for even the smallest cost overruns. By losing a key person, many businesses will find it difficult to maintain profit levels while that person is replaced.
Another Reason for Key Person Coverage
Another reason many business partners have key person life insurance in place is so that when they pass on, their shares in the business can either be bought by the other owner or passed on to their heirs. In this way, your heirs will not have to participate in a business that may or may not welcome their participation. A key person life insurance policy will make sure that there are funds in the company to allow for buying out partner shares in the business, if necessary or desired.
photo credit: “T” altered art
Tags: coverage, key man, key person, large business, Life Insurance, medium business, plan, small business
January 30th, 2009 at 7:47 pm
Companies really need to see how much their key staff contribute to their existence. One key member lost in a small company can easily force the company to close down especially in today’s economic climate.
November 30th, 2009 at 2:39 pm
It seems like business is still getting hit hard. Is anybody seeing an upswing in their respective niches? Health reform seems like a mess. I generate long term care insurance leads and annuity leads for the insurance industry, but volume has been terrible in the last two months. I am afraid the worst is yet to come, but maybe it is just my attitude.
June 24th, 2010 at 11:39 am
Many businesses overlook the importance of keyman insurance. By securing the right cover on key people in the business you can have peace of mind that should that individual be lost or unable to work, the business can go on unaffected. Keyman Quote can offer specialst advice to help get the right cover for your business.