Key Person (Key Man) Insurance

As a seasoned business owner, you appreciate the role of your top employees in your company. While your business might have hundreds of employees, there are those that form the engine of your operations. If you lose such an employee, the effects on your business are debilitating and for this reason you need to buy Key Person (Key Man) Insurance coverage.

Explaining key Man Insurance

If you have no such coverage, it is highly likely that you do not have basic insight into this form of coverage.  Here are some highlights to help you appreciate this form of life insurance:

What key Man Insurance entails

This is an insurance policy taken out by your business as protection against financial loss arising from death, or incapacitation, of a critical member of staff.

Who pays for a key Man Insurance policy?

Your business pays the premiums and is also the beneficiary in case the key executive passes away or can no longer work for you.

Who is a key person?

Anyone whose departure has probability of causing financial loss and strain qualifies for the title key man. This can be a highly trained specialist, business partner, project manager or for small businesses, the owner.

What are the benefits of a Key Person (Key Man) Insurance for a business?

These benefits are numerous to put it simply. Once you get the payment, you can use it to cater for any losses, among myriad other uses. For instance, you can use the payment as a retirement bonus for the employee, continue operations, hire a new key man, borrow against the policy for business management and any other urgent financial needs you have.

Simply put, Key Person (Key Man) Insurance is an integral part of your risk management and cannot be ignored if you want to maintain a competitive edge.