Do you own your own business? Do you have employees that are invaluable to the success of your company?
If you do, you may want to consider key man life insurance. Key man is basically taking out a policy that the company owns on a key employee’s life. The company is responsible to pay for the premium as they are the beneficiary. To establish the face amount of the policy, the company and their agent determine what they consider the value of that employee to the business. If something were to happen to this employee, the company would receive a death benefit that would help cover the financial loss to the business.
Key man is not limited to the CEO and the President, as it can be anyone who is valuable to the business and its success. Often times the business will use cash value life insurance to cover the life of the key employee (s). They can use the cash value to loan money to the business along the way. On top of that, they can give the policy at some point to that key employee as an extra perk. Some company’s will simply use term life as it is cheaper and for a period specific. It can also allow a company the ability to purchase even more death benefit with mortality rates at an all time low.
If your business would suffer with the loss of an important employee, you may want to take a look at key man life insurance