Key Employee Insurance

Most businesses insure themselves against the loss of building and equipment. But many of these same businesses fail to insure their most valuable assets – their key executives and key employees. The talents and experience of key individuals account for much of a business success. The unexpected loss of such an individual could be considered a capital loss and could result in a decrease in profits, not to mention the financial strain of recruiting, hiring and training a suitable replacement.

With key employee insurance, a business buys life insurance on the life of its key employees to ensure that the business can continue on sound financial footing if the key employee should die. An insurable interest exists between the business and the employee and, therefore, a policy can be issued to cover the financial loss that the company might suffer at the employee’s death. The company would be both the owner and beneficiary of the policy, and the employee the insured.