It is a life insurance for key employees that keeps the business running and growing. They are usually very hard to replace, and without help, your company may become history before you can even find a replacement. A key person insurance will aid you with funds needed for your company to stay running and to find a replacement if a loss of key figure is to happen.
How does it work?
With key person insurance, the business pays the premium and become the beneficiary of the policy, meaning the benefits provided by the insurance will go directly to the company’s funds. When the insured key person passes away, the business would receive a payout according to what’s stated in the policy. Key person insurance may also contain a disability policy, meaning they would also give a payout to the company if the key employee is unable to work anymore due to a disability, illness, or other causes.
What else can I do to protect my business from the loss of a key person?
To further decrease the impact of the loss of a key person, your business would need a succession plan. With this plan you can identify and develop employees to become a key figure or a leader in the company.
What other life insurance will my business need?
To keep the business stay on track, two insurance policies may provide great help. A funded buy-sell agreement is another type of life insurance for businesses with multiple owners. Each owner has to pay an insurance premium for all the other owners, and if one of the owners pass away, they would receive money that will be used to buy the share of the deceased owner according to its market value.
An executive bonus plan is a way to reward to key employees by giving them a permanent life insurance. The company will pay for the premium as a bonus for the employees and it will be tax deductible.
Life insurance is not only beneficial for personal use, but it can also help businesses survive and thrive. Feel free to contact us if you want to further consult about what policies would your specific business require.
At Western Pacific Insurance, we work hard in making sure that our clients are well-protected with policies that they can afford. To learn more about how we can help you, please contact our agency at (702) 932-3105 or Click Here to request a free quote.