Key man life insurance is extremely important to the financial well being of any company. Do you have an employee whose death would leave the company in shambles? This employee can be the CEO, owner, president, accountant, vice president, or even a tireless worker who knows more about the day-in operations of the company than the business owner does. Purchasing a key man insurance policy can save a company from bankruptcy.

Life insurance policies are generally not expensive. In a small company, many investors will not agree to contribute to the company until key employee insurance policies are purchased. They do not want to risk their hard-earned money to tragic circumstances. By purchasing keyman insurance, they know that safeguards are in place to protect the financial stability of the company.

 

If an important employee did meet with a tragic accident or pass away, the insurance policy’s face value is then paid to the company. This money can be used to buy out the deceased employee’s company shares, pay off creditors, offer financial assistance to the surviving family members, or financing the search to find a replacement for the important key employee. With key employee insurence policies, business can go on as usual and financial backers will not worry about whether their investment will be lost during times of hardship.

With keyman insurance, the company pays the life insurance premiums and then is named beneficiary. The life insurance policy is meant only to assist the company in case of death. Employees will never have to pay a cent for these policies.

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Insurance companies will base premiums on the employee’s salary, age, height, weight, health history, and medical exam results. There is no guarantee the employee will qualify for the insurance. The insurance company does have the right to refuse coverage. To be approved, it is often best to insure the employee at the youngest age possible. As one reaches middle age, the insurnace company is apt to deny coverage, or the rates will be too expensive.

If key man life insurance is denied, you can look into a normal term life ins. policy. The premiums may be higher, but it is worth a shot!

Do not overlook key employee insurance. If you have never considered the true importance of your all of your employees, you are overdue. Think about your employees. Which employees are critical to your company’s daily operations? How many of these employees would be missed? Look into keyman insurance today!