Within a company, there are certain employees that keep things moving forward. That person might be a director, key creative staff or in another executive-level position. If your company would struggle to recover from the death or disability of this person, purchasing Key Employee Life Insurance might be a good idea.
Like other types of life insurance, key employee coverage pays a benefit upon the death of the insured individual. In this case, the benefit is paid to the company holding the policy. It is designed to cover business losses that result from the loss of your employee. Here are a few ways it can help your business continue.
Replacing Lost Profits
A key employee can tone paly an oversized role in generating profits. Insurance can help reassure customers and replace profits lost while your business recovers.
Pay To Train a Replacement
It can be expensive to recruit, hire and train someone to take over an executive role, making this an attractive use for your insurance benefit.
Cover Legal Obligations to the Deceased Family
In some cases, you may owe the employee’s family a compensation package that could include a lump-sum payment or continued salary and benefits for a specified length of time.
When the loss of a key employee would impact day-to-day operations, adding life insurance can help ensure continuity of business and help you meet financial obligations in the event of their death.