04 Aug Key Person Insurance For Businesses.
Key Person Insurance For Businesses.
Can a business have a life insurance policy?
A business cannot have life insurance (1) itself. However, a business can have its financial security guaranteed by having key person insurance (2) coverage for their owner, investor, or employees.
To cope with the financial risks associated with firm owners or investors who pass. Business owners might include business life insurance plans into their operations. Some businesses provide special insurance plans. This is to help guard against loss in the event of a key employees passing.
Small business owners can reduce the risk that a loss presents by purchasing life insurance. It’s not unusual for business owners to keep life insurance for their business partners when they co-own a company. In this case, the policy benefit might be to pay off debt, maintain operating costs, or cover other costs. It could even be to buy the deceased owner’s share of the company.
What's key person insurance and what does it cover?
This type of policy covers life insurance, critical illness only or a combined policy which covers both.
The policy covers the individual over a specific term length. The premiums are generally guaranteed and there are often no penalties for cancellation.
What are the benefits of this cover?
The primary advantage of key person insurance is the peace of mind it can provide. Should something happen to you or your company’s key employees. The impact on the business will be significantly reduced due to the financial cushion provided by adequate key man insurance.
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