Replacing a key person takes time and money − and could cost the business valuable clients during the transition. Key person life insurance offers a death benefit that can help cover financial losses that occur at the death of a key person. This helps assure continuity of the business for employees, customers and creditors.
Taking out a key person policy on your top employees also affirms their value to your business, strengthening the relationship.
Other features of key person insurance
The death benefit can be used to recruit and develop a replacement for the previous key employee
Coverage is a business asset that enhances your company’s creditworthiness for commercial borrowing
The policy’s cash value may be available to your business through a withdrawal or loan if needed
The business pays the premiums, and they are non-deductible