Key Man and Buy/Sell Insurance
Key Man insurance and buy sell insurance are sub-types of life insurance that are aimed at the business world.
If a large portion of your business hinges on a few key people, you should give some thought to Key Man insurance. It is meant to cover the company's losses in the event of the death of a key employee. That employee may be a particularly capable sales person, a manager, or the company owner – the underlying assumption is that the company will suffer greatly should that person pass away.
Key Man insurance is generally a term life policy, with the length term being the time until that employee retires. The company pays the premiums on the policy and receives the death benefits if the employee unexpectedly dies. If the employee retires, the company may choose to also surrender the insurance contract, giving the employee the chance to convert the policy to a permanent one.
Buy/Sell insurance is typically set up in a business where there are 2 or more shareholders. This insurance makes it possible for the surviving owner to purchase the shares of the company from the disabled or deceased owner's estate or spouse.
It is vital for your company's financial health that you select the best insurance policy for your specific case. The above description is meant as a brief outline only, and does not reflect the full complexity of selecting the best insurance policy. If you wish to receive additional information, please contact us today.