Key Person Life Insurance: protecting the difference makers.
As a business owner, you recognize the contributions your employees make to your organization. Without them your business would suffer and, in some cases, could possibly be ruined. A key person brings significant value to your business, and it is that value you need to ensure in order to help protect your business.
A key person is someone who is responsible for management decisions, has a significant impact on the success of the business, and is highly paid.
Businesses can suffer from a key person's death in significant ways. There can be a loss of management experience and skills, a disruption of sales and production, and increased expenses due to hiring and training a replacement.
Key Person Life Insurance helps reimburse a business for the economic loss that occurs when a key person dies. With Key Person Insurance, business owners can offset the business risk of the death of employees who are essential to the success and profitability of the business.
One of the benefits of Key Person Life Insurance is that the employer is the owner and premium payer, and, at the death of the key person, the employer may receive policy benefits, income tax free, if certain requirements are met.
Premiums paid for Key Person Insurance, however; are not eligible for a tax deduction. We suggest you consult a tax advisor to ensure IRS requirements for establishing and paying Key Person Life Insurance are met.
Key Person Life Insurance can be used to recruit and develop a replacement for the previous key employee, helping to assure continuity of the business for employees, customers, and creditors.
Thank you very much for taking the time to learn about the benefits of Key Person Life Insurance. Talk to your Illinois Mutual agent about solutions to meet your coverage needs today.