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Key Person Insurance
Regardless of the type of business you own or operate, it’s important to seek out financial protection for your company in the form of insurance. Key person life insurance is a type of life insurance and disability insurance policy that reduces the impact of devastating loss on your company or team.
How Does It Work
what might happen if a key stakeholder, owner or high-ranking executive died?
Key person insurance policies provide a death benefit to a business if crucial employees die or become disabled. Crucial employees may be classified as an owner or co-owner, partner, CEO or other executive.
Personal life insurance provides benefits to family members or other loved ones after a death. Key person insurance pays a death benefit to the business, which can help ensure it remains functional and employees are taken care of in the aftermath of a loss.
Common purchasers of a key person life insurance policy include:
- Independent small businesses, such as local stores, whose owners’ reputations are key to success
- Software or tech companies with high performing salespeople or executives
- Organizations where one employee brings specialized industry knowledge and expertise to the table
What are the types of Key Person insurance?
Why choose Richard S. Bernstein & Associates?
With so many options from which to choose, deciding on the life insurance policy that’s best for your needs can be a challenge. Our licensed professionals will provide you with a comprehensive needs analysis analyzing your needs, budget, and risk tolerance to determine the type of policy that’s right for you. Being in the insurance business since 1964, Richard S. Bernstein personally works to obtain the best underwriting offers for you with the best insurance carriers and will provide you with an array of options to meet your needs.
If you would like for one of our experienced life insurance advisors to examine your individual needs, offer our expert advice, and give you a quote, please fill out the box above to contact us today.
Term Life Key Person Insurance
Term life insurance is a popular option for key person policies because it’s affordable. You pay premiums on term life insurance each month or year. Most term life policies include the option to pay for up to a 35-year term, with an option to renew at the end of the term. You are usually covered if the insured passes away any time during the term.
- Organ donation preferences
- Burial or cremation
- Final wishes related to cremated remains
- Cemetery placement (if required)
- Other services to be rendered, such as clergy, organist, music, etc.
- Type of casket to be used, if applicable
Whole Life Key Person Insurance
Whole life insurance policies are a permanent life insurance option. Unlike term life insurance, whole life insurance policies don’t have expiration dates. When you purchase a whole life insurance policy, it covers the insured person until they die or until you stop paying the insurance premiums. Whole life policies are more expensive than term insurance but they have the added benefit of putting your premiums into a savings account. Because the policy gains cash value, you can borrow against the value or withdraw money from the account.
Variable Life Key Person Insurance
Variable life insurance is similar to whole life insurance in that it doesn’t expire and stays in effect as long as you pay premiums. The difference is how the premiums are used. Instead of a savings account, they get placed in an investment account. Investments can be unpredictable, so this type of policy carries some level of risk due to market volatility.
