MONDAY, JULY 25, 2022
If you are a business owner, then it’s probably the business that you rely on to support all other parts of your life. After all, it is your source of income.
You not only want to support the business day to day, but also enable it for long-term success. Still, as committed as you might be, it’s a fact of life that no one is promised tomorrow. Of course, no one wants to die for many years, but you cannot predict the future. What would happen to your business if you were suddenly no longer around to keep the doors open it? How can you make it sustainable even in the face of your loss?
The answer might be a key man insurance policy. This coverage is essentially life insurance for your business, and can offer the critical benefit of continuity to a business that has lost a trusted leader. 
Understanding Key Man Insurance
When you buy life insurance, you will leave a sum of money to a designated beneficiary when you die. This might help them cover a multitude of expenses and ease their financial burdens following your demise. A key man policy, in effect, is life insurance. However, its beneficiaries are businesses, rather than individuals.
Think of it this way. If you are a business owner, what would they do without you if you suddenly vanished from the picture? The business could face a significant drop in income, not to mention a loss of talent and expertise. Not only could the business itself suffer, but the inheritors of the business (your family, a business partner, etc.) might also face significant financial losses, personally.
Key man insurance helps eliminate that risk. You can think of it the same way you would as a spare set of car keys. If you are the primary key that helps your business run, then your loss means that a new driver can’t start the car (I.e. run the business). The funds provided by the key man policy will ensure that they have the money to weather this storm without facing insurmountable financial losses.
Generally, it is the business itself that purchases a key man policy in the name of a leading employee (usually the business owner). This setup is what allows the business itself to file the claim for that person’s death. Therefore, it is the business that will directly benefit from the coverage provided by this policy, which is why you must work closely with your insurer to determine the best types and structures of coverage that are right for you.
No Comments
Post a Comment |
|
Required
|
|
Required (Not Displayed)
|
|
Required
|
All comments are moderated and stripped of HTML.
|
|
|
|
|
|
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only.
It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional
in your state. By using this blog site you understand that there is no broker client relationship between
you and the blog and website publisher.
|
Blog Archive
|