Would your business survive the loss of a Key Person?
Every business has assets that need to be protected, whether those assets are buildings, equipment, automobiles etc. However, often over looked is what may be a companies most valuable assets – Key People (aka: key employee). While, all employees serve an important role in the businesses where they work, certain Key People are essential to the overall success of a businesses.
In a nutshell – Key Person Insurance protects your business against the loss of a a key person. If there would be a financial loss to a business from an untimely death of a key person, insurance protection would cover this loss.
Key People may contribute talent and expert knowledge to their companies. As in possessing a specialized skill that may be essential to the success of the business. Or having a substantial client base that may leave the business/company if the employee prematurely dies. A key person may have a major ownership and/or decision-making role in the business.
Whatever the case may be, an untimely death of a key person within a business, means the business needs cash to cover the expenses associated with this loss. Replacing a key person takes time and money and could cost the business valuable clients during the transition. The cash may be used to fund a temporary employee or pay overtime to current employees who will take over some of the tasks and/or the reorganization of the deceased persons position. Another example is there may be a decrease in profits if the key person has a significant client base. The cash benefit may help a company through this transition.
Obtaining key person insurance to insure that the business will continue to operate on sound financial footing after a loss of a key person should not be overlooked in any business. A policy on an business/company owner can also provide the surviving partner(s) with the money to buy the deceased partner’s stake in the company from the estate.
Note: This blog is designed for general information purposes only. All information presented on this site should not be interpreted as legal advice and the author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information. For legal and tax advice contact your attorney or tax adviser.
Rita Sollie, Direct Insurance Representative with North Coast Life Insurance Company (NCL). No gimmicks or schemes here, just genuine and honest service. We don’t sell insurance, we solve problems. I welcome the opportunity to show you what NCL can do for your Life Insurance and Financial needs.
View INSTANT Term-Life Quote: www.insureyourfamily.com
If you prefer to speak with a local financial representative, call or email your request and you will be connected with a representative in your area.
Contact info: Phone: 800.541.5858 Email: email@example.com or Live Chat below.