Every employee in a company is significant, but some individuals are essential. The departure of key personnel can have a disastrous effect on a firm, whether due to their name, reputation, skillset, or the clients they bring in.
Many companies purchase keyman life insurance to offer a vital financial cushion that can assist in stabilizing the organization while leadership searches for a new course of action.
A sort of life insurance known as “keyman life insurance” is made to pay a company upon the insured’s death rather than that person’s beneficiaries. That “important person” could be a business partner or owner, or it might be a vital worker, like a person with highly specialized expertise or abilities.
A vital employee might also be the one who generates a disproportionately large amount of the company’s income. These policies are typically designated for workers whose absence will cost the company money and make it difficult and expensive to find replacements.
If a key employee passes away or becomes disabled, the policy pays money that can help maintain business operations, provided the policy has an additional disability rider.
The insured or a family member typically owns a life insurance policy. This type of life insurance is called company-owned life insurance, or COLI because the company owns the policy and pays the premiums. The business is the beneficiary and receives the death (or disability) benefit if the insured passes away or becomes disabled.
If your company owns a Keyman, don’t hesitate to protect your interest in the long run. We will guide you through the process with competitive policies, as always.