Key Man Life Insurance
Does your company need Key Man Life Insurance? Find out!
Every company has a few key members – employees whose expertise, knowledge, or client relationships keep the company moving forward. Often, this person is the company’s owner, but it may also be the engineering tech that knows the ins and outs of the company’s system, or the sales representative who has formed irreplaceable relationships with the company’s clients. Whoever it is, it is imperative that you consider what the loss of this person would mean to your business financially.
Many small businesses choose to purchase a Key Man Life Insurance policy. Under such a policy, the key person or persons are insured with the company as a beneficiary. The company pays the premiums, and in this way the potential economic cost of the loss of a key employee is mitigated. The benefit from a Key Man Life Insurance policy can be used to cover the costs of finding a replacement or recovering from the financial losses incurred through the loss of crucial knowledge or clients, or it can be used to ease the dissolution of the business. Many small businesses have lifelong employees who are dependent on the company’s financial strength, and a Key Man Life Insurance Policy can provide them with the extra money they need to be able to find another job should the company be unable to continue.
Other Reasons for Purchasing a Key Man Life Insurance Policy
You might also consider purchasing a Key Man Life Insurance Policy if your company is taking out a business loan. Many lenders will require a Key Man Life Insurance policy written with either the company or the lender as the beneficiary in order to ensure that the loan can be paid off even if the loss of a key employee means that the company is forced to dissolve. If your company is engaging in any sort of financial transaction with another entity, purchasing a Key Man Life Insurance Policy can ensure that any debt can be paid off.
Purchasing a Key Man Life Insurance Policy can save your company from financial ruin, allow your employees greater financial security, and give you a better chance of securing a business loan. A Key Man Life Insurance Policy is an essential part of your company’s financially stability.