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Commercial Insurance Terms
September 2, 2021
Life Insurance Terms
September 9, 2021
Insurance Pro Tip #6 for Financial Advisors:
Key Person Life Insurance
For your clients who are business owners or who may be part of a management team for a company, Key Person Life Insurance is a significant tool in your wealth generation and preservation toolbox. The untimely death of a key person like a CEO, other part owner, or director can create a potential financial shortfall while a replacement is named. A Key Person Life Insurance policy can be taken out on them with the business as the beneficiary.
Classic Scenario
A classic case may involve the death of the visionary who started the company. A Life Insurance Death Benefit of $1 million or more could pay for many things – a search firm for his/her replacement, a consultant to help manage the unexpected transition, or even financial support for the relocation or extra compensation of the replacement.
While the concept of Key Person Life Insurance may be straightforward, it takes a keen eye for detail and a savvy insurance advisor to navigate the process, ask the right questions, and deliver the maximum benefit for your clients and their businesses.
