Key Person Life Insurance: Would your Ship Survive without the Captain?

Posted by Sharon Healey, LUTCF, FSS, Client Executive on June 15, 2015 at 10:00 AM

In maritime tradition, the captain is said to “go down with the ship.” But must the ship go down with the captain? This is the metaphorical question behind an insurance coverage called Key Person. Key Person is insurance that protects a business in the event that a key employee dies—the company owns and is the beneficiary of the policy.

11002002385The loss of any person in an organization is devastating. The loss of a person who is critical to the company’s operations, sales or decision-making can instantly multiply the impact of that loss. What would your organization do if something happened to your CFO? Or how about that long-term colleague who is the backbone of your company? Have you ever thought about how your company would function without them? Regardless of the size of the business or organization, there is always at least one person that is critical to the firm’s success.

Facing mortality is uncomfortable for most people and planning ahead for an unforeseen loss is a difficult subject, but for those responsible for the longevity of a company, it is an important coverage to consider.

Key Person Insurance protects a business by addressing the financial impact of losing a key person in the company. With the coverage in place, a claim would provide funds to:

  • Offset interrupted or lost cash flow from reduced sales or company earnings
  • Hire a temporary substitute
  • Offset the expense of attracting and hiring a qualified replacement

Most executives overlook this type of insurance, because it’s not something they want to think about or plan for. Captains don’t think about going down with or without the ship. However, Key Person Life Insurance could be your saving grace in the event that an unforeseeable death takes place. Key Person Life Insurance can help keep a business going strong, even if tragedy should strike.


Topics: Employee Benefits, Individuals

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