Consider key person insurance to protect your company from the potential loss of this essential employee.
Small companies often have at least one employee with a distinct skillset, loyal client base, or a superior reputation, whose absence would ruin the business. Suppose you have an owner, partner, or other worker who is indispensable. In that case, consider key person insurance to protect your company from the potential loss of this essential employee.
What is Key Person Insurance?
Key person insurance is a life insurance that a business buys on an essential employee, with the employee’s written consent. The company pays the premiums and then receives the death benefit if the key worker dies unexpectedly.
Reasons for Purchasing a Key Person Insurance
You may want to buy a key person insurance policy to protect your company from losing a key worker for numerous reasons.
Your Company’s Reputation
If your company’s reputation is connected to a key person’s name, unique skills, and reputation, their loss may signify a drop in business. The policy’s death benefit can help support your company and give you time to seek an ideal replacement.
Loans
If your small company is searching for investors or taking loans, lenders may be hesitant to provide that money without a life insurance plan for key personnel.
Financial Burden
If the loss of your key employee would cause a financial burden on the business—because they bring in a large percentage of the business’s revenue or they are in a specialized role that would be difficult to replace—having some extra cash available if something happens to them may be critical to keeping your business afloat.
Business Partners
If there is more than one business owner and everyone agrees that they would like to keep the business, having key person insurance on each owner can provide the cash to buy out the deceased’s estate and continue running the business with the surviving owners.
Sole Owner of the Business
Are you the sole owner of a business? If you plan to close the business when you pass away, life insurance can give your beneficiaries the cash to pay off your debts and cover the company.
Talk to an agent at Malden Solutions about your situation and determine if a key person life insurance policy might be ideal for your company. Clients can call us at 410-435-4937 to get a free quote!
Find the Right Health Insurance Solutions for Your Needs
Malden Solutions has a wealth of expertise in providing employer insurance solutions, HR solutions, and individual insurance solutions to businesses both big and small. Our team of seasoned professionals can help you navigate the rapidly changing world of insurance with ease. We partner with businesses and individuals throughout the country to provide our dedicated services for employee benefits but also work within our surrounding communities in Maryland, Northern Virginia, and Washington, D.C. Contact us today to learn more about how we can provide effective, dynamic solutions for your business. Stay connected with us on Twitter, Facebook, and Linkedin