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Key Person Protection

Key person insurance provides business owners with Revenue Protection. If a business owner or key employee dies or becomes disabled, the business is provided with sufficient cash to compensate for the loss of revenue and replacement costs.

Key person insurance (also called Key Man Insurance) is a type of Corporate-owned life insurance which insures an employer against the death or incapacitation of a so-called key employee, usually an executive or partner. It is used by both large companies and small partnerships alike.

An employer may take out a Key person insurance policy on the life or health 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 may suffer in the event of the loss of a key person.

The key person may be an executive, principal shareholder, a senior scientist, or a particularly effective salesperson.