Key person insurance, also known as key man insurance or key employee insurance, is a type of insurance that a business purchases to protect itself against the loss of an essential owner or employee. It comes in three types: life insurance, critical illness insurance, and disability insurance.

1. The first type, which is key person life insurance, provides financial assistance to the business in case of the death of an important employee, such as a sales manager. The life insurance proceeds can be used to hire and train a replacement, ensuring the business meets its financial objectives.
2. The second type, key person critical illness insurance, provides a lump sum payment in case the sales manager falls ill and cannot work. This payment can help cover any financial losses or lower productivity from their absence.
3. The third type, key person disability insurance, provides financial assistance if the sales manager becomes disabled and cannot work. This type of insurance can help the business continue to provide a salary to the sales manager until they recover or reach the age of 65. Additionally, it can help cover office expenses and salaries during the duration of the disability.

All in all, key person insurance safeguards businesses against losing their vital employees and ensures their continued success.

Life insurance can serve a dual purpose of safeguarding your business and helping it secure loans. At times, during the early stages of your business, you may not possess the conventional assets required to secure a loan. This is where collateral assignment comes in.

Assigning a third-party lender as the primary beneficiary of a company-owned life insurance policy can be used as collateral for a business loan or line of credit. The lender can collect a portion or the entire policy during the loan’s duration. Additionally, in case of any unfortunate incident before the loan is repaid, the lender can claim the policy.

We tend to think of life insurance as income replacement; it is one of its primary purposes in many cases. If your loved ones depend on your income for their daily needs, life insurance offers you the peace of mind that they’ll have the financial support they need when you’re no longer here for them. Life insurance can help cover final expenses such as funeral costs and debt/loans such as your mortgage, to name a few examples.

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Critical Illness coverage offers financial compensation for cancer, stroke, heart attack or other debilitating illnesses. Such illnesses can sometimes require recovery costs and even force a leave of absence from work. Therefore, when establishing your policy, you can choose the coverage that meets your specific needs, as recovery costs can vary.

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Disability coverage replaces some of your income if you can’t work because of an injury or illness. This monetary benefit will continue until the benefit period ends or you return to work. It can help you and your family pay for necessary expenses like your mortgage, car payments, utilities, groceries, etc.

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Every business, regardless of size, should have a Group Benefits plan. We proudly work with various insurance carriers, allowing us to custom-build a plan that perfectly fits your needs and budget. It benefits your employees to get coverage at a reduced cost compared to most personal plans. Help reduce financial stress if something happens to protect your employees and their family’s health.

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