Protect your business against the unexpected death or disability of a valuable key employee.
Typical Group Life and Disability insurance offered to employees usually only cover a fraction of a key executive’s high income. Providing your executives with key person insurance creates a safety net for your employees, as well as your business.
Statistically, key personnel who generate a substantial amount of income for the business, and other types of important key employees who suffer an illness or injury can lead to:
- Interruption or loss of existing and potential product sales.
- Loss of confidence from existing or new suppliers.
- Loss of competitive edge afforded by innovation or design expertise.
- Special projects delayed or not completed.
- Additional strain on remaining staff who have to cover for the missing key person.
- Lowering of staff moral.
- Large recruitment costs and head hunting fees to find a replacement.
All these factors make it imperative that well run businesses insure their key staff, as well as their other assets.
Boyce & Associates can customize a benefit package to wrap around the group plan for each of your key people, ensuring they and their family members are adequately protected in the event of an untimely death, accident or illness.
Types of Key Person Benefits
Key Person (Key Man) Life Insurance protects your business if one of the main partners passes away unexpectedly, and helps to minimize financial loss. Your business is typically responsible for the premiums, as it is also the beneficiary. The value of your business (as established through financial records) will help to determine the benefit level and premium amounts.
A Business Overhead Disability policy prevents businesses from going under from regular overhead expenses while the business owner is unable to work and run the business due to disability. These types of policies will typically pay for things like employee salaries, rent and utilities, among other expenses.
Buy-Sell Agreements protect a business after the death of a key employee. Also, known as Continuation Agreements, they are tied to and funded by life insurance policies. The agreement sets out the details of the transfer of business interest by the key-person (or his/her estate) upon a certain triggering event–usually death, disability and retirement. The surviving or continuing business owner or partner can rest assured knowing that they will be able to purchase the key-person share without interference from other survivors of the key person and his/her estate.
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