Key Person Life Insurance

Key Person Life Insurance

If you have an employee who is crucial to the success of your business, key person life insurance can provide financial support in case of their unexpected passing. Eber & Associates partners with you to safeguard your company in the event of the unfortunate death of a company leader.

Our team will collaborate with you to create a coverage plan that ensures your business can operate smoothly for your employees, customers, and creditors.

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What Is Key Person Life Insurance?

Key person life insurance is a type of policy that a business purchases for the life of an owner, a top executive, or another individual considered critical to the business. The company is the beneficiary of the policy and pays the premiums.

The purpose of key person life insurance is to protect the business from financial loss or dissolution if that employee dies. The death benefit from the policy can be used to:

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Pay for the cost of hiring and training a replacement employee

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Offset lost revenue until a replacement employee is hired

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Cover the cost of lost contracts or business opportunities

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Provide financial assistance to the key employee’s family

Finding the Right Key Person Life Insurance

The amount of insurance coverage that a business needs depends on a number of factors, such as:

The Value of the Employee’s Role in the Business

This includes the employee’s salary, commissions, and other forms of compensation, as well as the value of their expertise, experience, and contributions.

Cost of Hiring and Training a Replacement

This includes the cost of advertising, recruiting, and interviewing candidates, as well as the cost of training the new employee.

Lost Revenue

If the employee dies, consider the amount of money the company would lose, including any loss of sales, profits, productivity, or content generation.

Financial Resources

The business should be able to afford the premiums for the key person life insurance policy and justify the expense when compared with revenue and other expenses.

Type of Policy

There are two main types of key person life insurance policies: term life insurance and permanent life insurance. 

Post-Mortem Considerations

If things go wrong, the payout could be utilized to gradually shut down operations in an organized way instead of dealing with the challenges of an abrupt liquidation.

Key Person Life Insurance Benefits

Key person life insurance is typically purchased by small businesses, but it can also be used by larger companies to protect against the loss of essential employees.

The advantages of key person life insurance can be significant:

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It can help protect a business from financial loss
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It can provide peace of mind for business owners and executives
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It can be used to attract and retain key employees
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It can be used to finance a buy-out of a key employee’s interest in the business

Key Person Life Insurance with Eber & Associates

Protect the future of your business and your employees by partnering with Eber & Associates. Together we can determine the right policy for your organization.

Eber & Associates can help you protect your business through life … for life.

Custom Insurance the Smart Way

When it comes to custom insurance solutions, you need a team you can trust to help you find the perfect fit. Let Eber & Associates guide you to a more secure tomorrow with the care, coverage, and confidence you deserve.

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