Does your business include someone whose contribution is vital to your business? If yes, then key person life insurance should be a critical component of your business continuity and succession plan— especially if you’re a small business owner.
If an insured key employee were to die, key person life insurance would provide a tax-free cash payment that your business could use as working capital and to help manage issues related to the person’s death, including:
- Recruiting, hiring and training your employee’s replacement, which can be both time-consuming and expensive
- Paying off debt and dealing with creditors that wish to expedite loan repayment
- Alleviating potential lenders’ concerns about your company’s financial health
- Reassuring customers, employees or investors that the business will continue operating
What’s more, if you or your family rely on your business as a primary source of income, key person life insurance can help ensure that the business will continue to provide a secure financial future