Key man life insurance can keep your business afloat in the event of the death of any employee who is an integral asset to the company’s survival. We’ll work with you to design coverage that helps assure continuity of your business for employees, customers and creditors.
You might describe the skills and knowledge of the senior staff as priceless, but if anything happened to them, the financial losses for your business could be very real.
Where ordinary life insurance compensates a person’s financial dependents for loss of income, key man life insurance is all about the costs a business faces when the person dies. It’s best suited for staff who are so vital to the company’s operations that it could struggle to survive without them.
The payout from a key man life insurance policy will ideally help the company stay afloat while the other members of your staff come to grips with running the business, or until your business hires a suitable replacement and brings them up to speed.
In the worst-case scenario, the payout could instead be used to wind down operations in a controlled manner rather than face the chaos and damage of a forced liquidation.
In addition to paying out when a key staff member has passed away, some key man policies will also payout if the person is diagnosed with a terminal illness or suffers a critical illness that means they can no longer work.
Key man life insurance is a great way to protect your business. If you think this is a good fit for your business, let us know. We can walk you through your options.
When most people think of life insurance, they probably think of individual life insurance. This is an insurance policy that provides coverage to the relatives of the deceased. While key man insurance is a form of life insurance, it is different from individual life insurance because its coverage is meant to mitigate a business’s losses if a valuable employee passes away.
If you are trying to determine if your business needs a key man life insurance policy, consider the following questions:
If so, you might want to consider a key man life insurance policy. Additionally, some banks include key man life insurance as a part of their lending requirements. AZCAL Life Insurance will help you determine exactly what you need.
The business is the owner and beneficiary of the key person life insurance policy. The business will pay the insurance premiums and then if that key person passes away, the business will receive the insurance payout. This coverage will help the business survive while figuring out the next steps.
In most cases, key man life insurance premiums are not tax-deductible. However, if the “key man” employee passes away, then the insurance coverage paid to the business is typically free of income tax.
Calculating key man life insurance policies will differ in every situation. However, you should consider the following points when determining how much key man life insurance to get:
If your business needs a key man insurance policy, don’t hesitate to contact our insurance experts. We will help you get the insurance policy you need.
As an independent agency, we offer multiple options at competitive prices. Contact us today!