Key Man Life Insurance is designed to meet the needs of commercial organizations, protecting your company against the loss of business resulting from losing a vital member in the event of their death or inability to work. Upon losing an important senior executive or income generating individual, the policy will pay to the benefit of aiding the continuity of business operations.
A Key Man Life policy seeks to compensate the organization from future losses resulting from losing a vital member, and can cover losses for an extended period of time. Coverage includes a range of needs such as funds for temporary staff recruitment, training, and wages. Additionally, the policy can safeguard a company’s profits for the period where the vital member is out of duty – such as providing compensation for the loss of a head salesman.
Key Man Life is imperative for smoothly running a business that depends on the contribution of specific vital members. Types of employees often insured under Key Man Life insurance include, but are not limited to:
At INLE Risk Management we will determine whether Key Man Life is suitable for your business and produce comprehensive solutions to fit all your company’s needs.
Key Man Life is imperative if you want to maintain smooth operations and productivity with your company. Like everybody else, the most important members of your team are subject to the risk of illness or injury. Protect your company and ensure the continuity of production should a vital member of your team become incapacitated.
Often, lenders and banks will require Key Man Life Insurance in order to offer a loan or investment.
There are a number of individuals who you should seek to protect with Key Man Life Insurance for your company – namely any person should be considered if their absence would adversely affect the company. This is often the case when:
And a worst-case scenario would be a company going bankrupt after losing a key individual. A Key Man Life Insurance policy can also be used to offset severance and shutting down the business.
In addition, Key Man Life can be utilized for employee recruitment and retention. For example, as an incentive, the Key Man Life insurance policy can be transferred to a traditional life insurance policy upon retirement.
It is important to note that Key Man Life Insurance does not provide an indemnity, but rather compensates an organization for the loss of the key member at a pre-determined settlement. In the event of death, the policy pays out to the benefit of the company, not to the covered employee’s family. Since the insurance is associated with running the business, the policy coverage does not extend past employment nor can it typically be transferred upon leaving or moving companies. This is not to be confused with Group Life, where the benefit is paid to the employee’s family, to protect his family from financial burden after losing an income generating member.
At INLE Risk Management we construct ideal bespoke solutions to fit any risks or challenges your business may face.
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