Key person life insurance - What you should know and why you should consider it?
You already know that as a small business owner you are critical to your company's success, but what about your employees?
You may have certain employees who are "key" to the success of your company. If one of these "key" employees were to die, how would that affect your business? Would your company suffer a loss of money, slowdown, etc. as a result?
That's where key person life insurance can help.
What is key person life insurance?
Key person life insurance is simply a policy taken out on the life of the key employee. If the employee dies, your business would receive the life insurance proceeds, in most cases - tax free.**
As a business owner, you can use the insurance proceeds to help make up for the loss of revenue you suffer.
Who is key and who can qualify for key person life insurance coverage?
In order to qualify for key person life insurance coverage, insurance companies will want to know:
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Why is this person important to your company?
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What special skills does this person provide to your company?
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What knowledge does this person possess about your company that is critical to your success?
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How would you suffer if this person died?
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How long would it take to find/train a replacement person?
The above are typical questions that an insurance company will want to know before providing key person life insurance.
How Much Coverage is Available?
5 times the key person's salary is a typical guideline, BUT there are circumstances where it may be possible to obtain up to 10 times the individual's salary. Each company's underwriting is different.
Call us today at Toll Free (800) 909-2040 to get a free, no pressure, no obligation comparison.
