Key employee life insurance is usually purchased on one
or more key people in a business to protect the business
from the economic loss associated with an untimely death.
The company buys the insurance to cover the life of the key
person and is also the policy beneficiary. In the event that
the key employee dies, the business receives the lump sum
policy proceeds that can be used at the company’s discretion
to stabilize the company until a replacement employee can
be found.
 Key
Employee Life Insurance Concerns
Types
of KeyMan Life Insurance
Checklist
for Shopping for Key Man Life Insurance
Key Employee Life Insurance Concerns
Once the need for key employee life insurance has been established,
there are a few questions that should be answered before
you begin to shop for a policy. The answers to these questions
will be helpful in determining the type of insurance needed,
the amount of the policy and how long the policy should be
maintained.
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Why are you considering
key employee life insurance? |
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What are the contingencies for the company if a key
employee dies? |
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Would the business continue operations or liquidate
or be sold? |
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Can a capable replacement employee be easily located? |
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How much will it cost to locate and train a replacement? |
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What type of compensation will it take to hire the
new employee |
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What percentage of revenue is directly attributable
to the key person? |
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Would the key person’s death result in the loss
of clients? |
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Is the company willing to self-insure? For more details
see, “Key Man Life Insurance Alternatives”. |
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Where do I locate a competent professional insurance
agent that has experience in working with companies such
as ours? See “MEG Testimonials”. |
The answers to the questions above will providing a good
starting point in your efforts to secure the best key employee
life insurance policy. If you
have additional questions, please call MEG Financial today
at (877)
583-3955. We specialize
in key employee life insurance and have helped thousands
of businesses nationwide.
Types of Key
Employee Life Insurance
There are two basic types of life insurance used for key
man life policies: term life insurance and universal life
or whole life insurance. The type of policy used depends
on the specific needs of the business. For example, start-up
firms that do not have steady cash flows would use term life
insurance because of its relatively low cost and flexibility.
On the other hand, more established companies with significant
earnings may select universal life or whole life insurance
as these policies build cash value which is an asset on the
company’s balance sheet and can be accessed anytime
at the discretion of the company. For more details on the
types of life insurance used for key man policies see, “What
Type of Key Man Life Insurance Policy Should I Buy?”
Checklist for Shopping for KeyMan
Life Insurance
When shopping for key person life insurance there are several
critical questions you should ask your agent or broker. Without
a fair “apples to apples” comparison, you can
easily select a policy that doesn’t adequately meet
your needs. Below are just a few of these “key” questions:
Call MEG Financial today at (877)
583-3955 and an insurance
professional can assist you with the questions above and
provide you with detailed answers to all of your key man
insurance questions.
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