Key Person Life Insurance is used to protect a business in the event of the death of a key individual or individual(s) within the company. This type of life insurance offers financial support to the company so it can survive or continue operating even if the key individual or individual(s) can no longer contribute. This type of life insurance provides expenses in the form of employee wages, credit line payments, buy-sell agreements, and estate settlement expenses if the insured individual passes away.
This type of insurance is beneficial in a number of ways. It can help ensure continuity of business operations, protect the deceased's family, provide liquidity, and replace lost capital. Key Person Life Insurance is also beneficial to shareholders and other stakeholders, as it offers protection against disruption in the event of the death of the key person. The proceeds of the policy can be used to either buy out the deceased's share of the company or to pay for a search for a suitable replacement for the key individual.
Overall, Key Person Life Insurance is a great tool for businesses to have in order to remain financially secure in the face of a key individual's untimely death.
