Organizations often have people working within them who have expertise or contacts that are unique to them. It may be a sales representative who has relationships with all the clients, a technician with a very particular skill set, or perhaps a manager in a remote location, all of whom would be difficult to replace.
For all these cases a business could choose to minimize its risk by purchasing Key Person Disability, and/or Key Person Life Insurance, which would provide a tax-free cash benefit to the business in the event a key employee dies, is disabled, or diagnosed with a critical illness respectively.
Ensure the organization has funds to recruit, hire and train a replacement person.
Use insurance proceeds to pay off debt and manage creditors.
Ease lenders’ and employee concerns about your company’s financial health.
Reassure customers, employees and investors that your business will continue to operate.
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Organizations that employ someone whose contribution to the company cannot be easily replaced.
Organizations where the loss of a particular person's contributions could result in substantial financial impact and/or the business being forced to close.
Personnel who have knowledge, skills or talent that few others can duplicate.
Personnel who possess unique skills which may not have been acquired through education or experience but through their own creativity, talents and interests.
Personnel whose skills and intellectual capital are so valuable that the business would suffer substantial financial losses due to that person's death or inability to work due to a disability.
In the event that one of your key personnel passed away, or disabled; your business would receive a tax-free sum which you could use to:
Premiums for key person policies are not tax-deductible, however any benefit received will be tax-free.
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