Why do you need Key Person Life Insurance? There could be multiple reasons. If you're business has multiple owners or employees who are essential to continued operation, you could have a serious problem if a catastrophic event were to occur!
Most common scenarios:
Multiple Business Owners -
Often a business has more than one owner. Say for example ABC Printing Corp. has 2 owhers, each with a 50% interest in the company. Owner 2 goes on vacation and has a tragic accident while deep sea fishing. His interest in the company now becomes the interest of his spouse or beneficiaries of his estate. This could be a single person or multiple family members.
Imagine having to settle with 20 members of your business partners family for his portion of the business! Unfortunately, this is a very common scenario. Many business shut their doors due to liquidation of assets to settle a deceased partners interest in the company. Unless you have enough cash on hand to buy out the other partners' family, you should strongly consider your alternative.
Life insurance in this case can help you establish what is called a Buy/Sell Agreement. This is a mutual agreement between all partners of the business to initiate an automatic sell of the deceased owners portion of the business and the purchase VIA proceeds of a Life Policy.
Unique Empoyees -
Examples of Key Persons:
These types of employees could cause a serious hardship in the continued operations of your business if something were to happen to them. In some cases, the business would be unable to continue at all. A Key Person Life policy could help you the owner, exit the business or hire and train a replacement.
Need a quote or more information on Key Person Life coverage? Please feel free to call us or submit an Online Quote Request!
