KEY PERSON INSURANCE

Key person insurance is simply life insurance on the key person in a business.  In a small business, this is usually the owner, the founders or perhaps a key employee or two. These are the people who are crucial to a business--the ones whose absence could potentially  sink  a business.  A business should  definitely consider this type coverage on valuable employees.

Here's how key person insurance works: A company purchases a life insurance policy on its key employee(s), pays the premiums and is the beneficiary of the policy. If that person unexpectedly dies, the company receives the insurance payoff. The reason this coverage is important is because the death of a key person in a small company can cause the immediate death of that company. The purpose of key person insurance is to help the company survive the blow of losing the person who makes the business work.

 The company can use the insurance proceeds for expenses until it can find a replacement person, or, if necessary, pay off debts, distribute money to investors, pay severance to employees and close the business down in an orderly manner. In a tragic situation, key person insurance gives the company some options other than immediate bankruptcy.

If the company is a sole proprietorship and employs just you and no other employees or has no other people who depend on it, then key person insurance isn't as necessary. You'll notice we didn't mention your family--don't confuse key person insurance with personal life insurance. If you have a spouse and/or children who depend on your income, then you should have personal life insurance for that purpose.

How do you determine who needs this insurance? Look at your business and think about who is irreplaceable in the short term. In many small businesses, it's the owner who holds the company together--he may keep the books, manage the employees, handle the key customers and so on. If that person is gone, the business pretty much stops. 

GET A QUOTE

North East Mall

1101 Melbourne Rd  Ste 5004 Hurst, Texas  76053

The Vinnedge Building

2100 N Main St  Ste 107 Fort Worth, Texas 76106

Email: info@nationsinss.com | Office: 1 (833) 676-5589 | Fax: 1 (817) 284-1717

CONTACt US

North East Mall

3125 N. Main St,

Fort Worth, Texas 76106

The Vinnedge Building

2100 N Main St  Ste 107

Fort Worth, Texas 76106

Email: info@nationsinss.com

Office: 1 (833) 676-5589

Fax: 1 (817) 284-1717

VISIT US

Monday - Friday 

10:00 am to 6:00 pm

Saturday 

By Appointment Only 

Sunday

Closed

 

TELL US

  • Facebook Social Icon
  • Instagram
  • Wix Twitter page
  • YouTube Social  Icon
  • Wix Google+ page
  • pera_edited.png
  • Pinterest Social Icon
  • stumbleupon.png
  • Tumblr Social Icon
  • Yelp! App Icon
  • BBB Accredited Business

Contact us: 1 (833) 676-5589

 © 2018 by Nations Insurance Solutions