Key man insurance has become a very important security measure for many companies doing business in today’s world. It is a common occurrence that there is one or more people in a company that are very important to that company’s success. Without that person doing their job, the company would suffer an extreme hardship.
In most cases this is an executive in a company. To prevent a situation where a company could have a large financial loss if a that executive were to perish, companies purchase a key man life insurance policy. This is usually a simple term life insurance policy with a guaranteed rate for either 10, 15, or 20 years. You can get a longer term insurance policy or even a permanent life insurance policy, but for cost reasons it isn’t done in most cases. This policy is owned and paid for by the company. The of the beneficiary of the key man insurance policy is the corporation itself.
You might be interested to know that almost every large corporation has a key man insurance policy on each one of their executives.
The process of getting a key man insurance policy is almost identical to the process of getting life insurance on yourself, with the exception of needing a few extra signatures than normal. If you have any questions on getting a key man life insurance for one of your employees, please in the comment section below. I am always happy to help.