Key Person Insurance
Employees are the greatest asset a business has, and all businesses have key individuals, which without them there would be no business. Key Persons can be anyone from the owner, the partners, executives, a key salesperson or anyone else that the business heavily depends on.
If a Key Person were to die or become unable to perform their duties due to illness or disability the business will suffer a loss. This loss can come in the form of lower sales, increased overhead or loss of goodwill. Protecting your business against these potentially catastrophic losses is where Key Person Insurance provides a solution.
An employer may take out a Key Person Insurance Policy on the life of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company. The employer does this to offset the costs (such as hiring temporary help or recruiting a successor) and losses (such as a decreased ability to transact business until successors are trained) which the employer is likely to suffer in the event of the loss of a key person.