Key Person Insurance, explained.
Protect the business when losing one person would change everything.
Key Person Insurance
Key person life insurance covers an owner, leader or employee whose death would create a serious financial loss for the business. The business typically owns the policy, pays the premiums and receives the death benefit. That money can help maintain operations, recruit a replacement or manage debt while the business adjusts.
Inside a Key Person policy.
Is this for you?
Plain language answers.
Consider lost revenue, replacement and training costs, business debts and the time needed to recover. We work through those numbers rather than choosing a benefit from salary alone. Financial and medical underwriting may be required.
Yes. Written notice and consent generally must be completed before an employer owned policy is issued. Insurable interest and reporting requirements also apply. We coordinate with your legal and tax advisers on the requirements for your situation.
No. Key person coverage helps the business absorb a financial loss. Insurance used to fund a purchase of an owner’s interest serves a different purpose and needs a properly drafted agreement. A business may need both arrangements.
This page describes key person life insurance. Premiums are generally not deductible when the business is the beneficiary. Death benefit tax treatment depends on satisfying applicable rules, including employer owned life insurance requirements. Annual Form 8925 reporting may apply. Consult your legal and tax advisers before placing coverage.
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