Key Man Life Insurance
Protect Your Business after a Critical Loss
If you were to pass on, would your business keep growing without you or would the doors have to shut and your employees lose their job and income? Do you have a team member that is so vital to the health of your business that if they died, your company would struggle to remain viable until a suitable replacement could be found? If you are a small business or rely on a vital employee to keep business moving, then you should consider obtaining a key man life insurance policy.
When you plan for and purchase a life insurance policy either for yourself or a key employee, you are protecting the survival of your business in the event of a death. This means that your business can continue serving clients even during this tragic loss. At The Nowell Agency, we can discuss roles and responsibilities within your business to talk about whom to cover and tailor a policy to fit your needs.
Criteria for Purchasing Key Man Life Insurance
Key man insurance covers an individual or group of individuals whose loss by death would create a significant financial hardship to the business. The company pays the premium for the policy and is the beneficiary, receiving the proceeds at the time of death.
Keep these three main issues in mind when determining whom to cover:
- The effect on business survival or continuity – This life insurance coverage is not for just any employee. It is for those employees whose sudden death would affect the viability and continuity of the company. For example, as an owner of a small business, your death could easily affect the survival of your business.
- The process of replacing a vital employee – Consider those employees who may be extremely difficult to replace in a timely fashion. For example, if you have a top salesperson who brings in a large volume of sales, or a scientist who develops vital intellectual property, it will take time to replace them. Your company can weather that lag in sales or research and development with the aid of proceeds from the policy.
- Securing financing for an SBA or bank loan – Having a key man life insurance policy can aid in obtaining an SBA business loan.
How Much Coverage Do You Need with a Key Man Life Insurance Policy?
There are different ways to decide how much coverage your company needs. Things to consider include the cost of replacing a vital team member, their age, the nature of your business, and the net worth of the company.
One of our financial agents at The Nowell Agency can sit down with you to discuss your options, and help find you the right policy for the right price.
Protect Your Company and Employees’ Future with Key Man Life Insurance
For over 30 years, The Nowell Agency has worked with business owners to get them the coverage they need for various stages of their business lifecycle. Our agents are experts in all types of insurance. We work with a variety of providers to find you the best key man insurance for your company’s needs. You can trust us to help you protect your business. One of our experienced agents will be happy to tailor a policy to suit your goals.