What is a Key Person Plan?

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A key person plan is a strategy for providing personalized care and attention to a particular individual, such as a student, patient, or client. It involves assigning a designated team member to be responsible for the individual's wellbeing, and providing them with the resources and support they need to reach their goals. Additionally, it involves developing a plan for communication and collaboration between the key person and the individual. This plan should include regular meetings, check-ins, and feedback. The goal of a key person plan is to ensure that the individual receives the best possible care and support.

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A key person plan, also called a key man plan, is an insurance policy used to protect a business from the financial loss associated with the death or departure of a key individual. It works by providing the business with a lump sum of money to make up for any losses that might occur.

Here are some key points to understand about a key person plan:

The policy is taken out on an individual, who is an integral part of a business. They could be a leader, an expert, or a key employee.
It protects the business against losses if the key person dies or departs.
The life insurance policy pays out the benefits to the business if the key person dies.
With a key man policy, the business can use the lump sum payout for a variety of things, including to cover any financial losses, loss of revenue, or to hire and train a person to replace the departed key individual.
It is important to review your key man policy frequently as it can become outdated when the key person changes roles or leaves the business.

If you'd like to learn more about key person plans, you can read this article from The Balance: https://www.thebalance.com/key-person-insurance-what-is-it-and-why-do-you-need-it-4082037