cover is an insurance offer that provides the business with a sum of money if a key person
dies or is seriously ill.
The key person
insurance is the alternative to forcing the company to pay out a large sum of capital that is depended upon or critical to the business's function.
The loss of a key person
can cause a business to be hit by a loss of profit, reduced sales, recruitment/training costs and disruption to their plans, to name but a few potential problems.
A company owned a key person
policy with several million in face value.
However, only one in four business owners--24 percent--has an individual disability insurance (IDI) policy, fewer than one in 10 (9 percent) of business owners have key person
disability insurance, and fewer than one in 20 (4 percent) have a disability overhead expense plan in place.
A key person
can be anyone directly associated with the business whose loss can cause financial strain to the company.
insurance protects a business when a key person
insurance can be put in place to provide the funds for advertising and recruitment of a replacement in a business.
The private equity professionals think of key person
life insurance to help protect their investment, but that's where most of them stop.
The main focus of this discussion is the key person
If a company loses that key person
, the skill and share of business is gone, and the costs have to be absorbed.
In the event of losing a key person
, either through critical illness or death, the company's future profit and survival is at risk.