Today we would like about a type of insurance coverage every company should consider: Key Person Insurance.
A key person is an employee who offers a crucial contribution to the success of a company. Think of a very talented salesperson or a CEO with unique expertise. If a key person or employee were to pass away, that would affect the company financially. That’s why some companies cushion the blow with Key Person Insurance.
A Strategy to Protect Your Business
The idea at the core of Key Person Insurance is protecting your business. If the employee covered by the policy should pass away, you can use the death benefit to recruit and train a new employee, guaranteeing continuity of operations. You can customize some Key Person Insurance policies to include a rider that also covers disability of a key employee.
The Policy’s Cash Value May Be Available to Your Business
Your Key Person Insurance may include a Cash Value feature. This is an investment account, and depending on the terms of your coverage, your business may be able to use the cash value feature through a loan or a withdrawal. So Key Person Insurance gives you not only peace of mind but also an extra option to improve your company’s cash flow.
It Also Offers Financing Advantages
A Key Person Insurance policy may make it easier to get access to some financing options. After all, this kind of policy lowers the risks your business face, and this is an attractive feature to lenders. For example, if your company goes public or merges with another company, you may need to take out Key Person Insurance policies on your most important executives.
Who Owns the Key Person Policy?
This is a common question among business owners interested in purchasing Key Person Insurance. This may vary depending on the specific structure of the company. The most common solution consists in having the company owning the policy, paying the premiums, and being the main beneficiary. However, the key person must provide in written their consent to the company owning the policy.
Contact the Key Person Insurance Experts at Delgado’s Insurance
If you are looking for Key Person Insurance in California, at Delgado’s Insurance we are committed to helping you find a policy customized to the unique needs of your business. Our full range of insurance solutions gives you the peace of mind that only an experienced insurance agency can provide.
We have offices in Riverside, California, and Bloomington, California. Contact us today by telephone (951-361-0084, 909-421-9003), email, or through our social media accounts to get a free quote and learn more about our wide range of insurance options.