Key Person Insurance

Ensure business continuity if you lose personnel vital to your business.
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What is Key Person Insurance?

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.

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Ensure the organization has funds to recruit, hire and train a replacement person.

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Manage Payments

Use insurance proceeds to pay off debt and manage creditors.

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Financial Health

Ease lenders’ and employee concerns about your company’s financial health.

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Reassure customers, employees and investors that your business will continue to operate.

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Key Person Insurance is a good fit for:

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Organizations that employ someone whose contribution to the company cannot be easily replaced.

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Organizations where the loss of a particular person's contributions could result in substantial financial impact and/or the business being forced to close.

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Personnel who have knowledge, skills or talent that few others can duplicate.

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Personnel who possess unique skills which may not have been acquired through education or experience but through their own creativity, talents and interests.

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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.

What types of Key Person Insurance are there?

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Key Person Life

  • A wide range of coverage amounts are available.
  • Can choose from term and permanent life insurance solutions.
  • Premiums are not tax-deductible, however proceeds are tax-free.

Key Person Disability

  • Ages 18-55 eligible to be insured up to ~$15,000 per month of benefit.
  • Coverage can be maintained until certain ages or when the employee leaves the company.
  • Premiums are not tax-deductible, however proceeds are tax-free.
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How does Key Person Insurance work?

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:

  • Recruit, hire and train a replacement
  • Pay off debt and deal with creditors
  • Alleviate lenders' concerns about your company's financial health
  • Reassure customers, employees, and investors that the business will continue operating
  • Simply replace the income that person would have generated

Premiums for key person policies are not tax-deductible, however any benefit received will be tax-free.

Get in touch

Send us a message and we'll get back to you within 1-2 business days.

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