The benefits of having key man life insurance!

Key Man Life Insurance will supply your business with cash when you need it the most? A key man life insurance is exactly what the title says it is, it protects the life or lives of key employees that work for your organization. A Key man also could mean the business owner as well as a valued employee.

This type of policy helps protect the companies owner and the other employees in case of the death of the highly valued employee or owner. Most business owners that are successful have an understanding of planning properly for unforseen circumstances that could affect profitability.

The business buys a term life insurance policy on the life of the key employee or possibly a cash value policy. They pay for the premiums and they are the ultimate beneficiary of the policy. Upon the death of the covered employee the company will receive the death benefit proceeds from the policy. The monies are typically used to offset any decreased revenue, pay bills, hire new and qualified replacements and to fund a benefit for the deceased's family.

How do you know if you need this type of policy or plan to help protect your business?

By answering a few simple questions you should be able to figure out if key man coverage would be a good choice for your business.

• Could your company withstand the loss of one or more of your key employees from a sudden death or accident?
• How long and how much would it cost to replace your number one salesperson or sales manager?
• How would your clients react to the death of the key employee, what if you lost your valued employee to your competition. would the customers that your key person handles follow him or her?

The probability of your company being affected by one of the above factors is very high if you look at statistics.

How does Key Person Insurance help you or the company when the policy is needed? First it can help with interrupted or lost cash flow, loss of clients to a competitor, negative impact on your credit and last but not least provides capital to attract and hire a qualified replacement.

What are the advantages of a Key Man Life Insurance policy? Business gets to select which employees are included in the plan. Life insurance proceeds are distributed income tax free to the business (typically). creditors and customers can feel at ease knowing that the continuity of the business will not be affected. Key Man coverage is as easy as applying for the life insurance policy for underwriting and putting the policy in force.