Most companies have at least one individual who is a critical part of the company's operations and success. This person may be a partner come, owner, majority stockholder, or another individual who plays a critical role in the company's success. If this employee were to unexpectedly leave the business due to a death disability or immediate resignation, it might be hard, if not impossible, for the organization to survive.
If your company has an employee who is vital two its success, critical person life insurance or key-person disability insurance can help protect you and your company from a significant loss caused by their absence. Critical life insurance is a great solution that can give your organization options other than bankruptcy should you lose your company key person or people without notice.
How does key person life insurance work?
Key person disability insurance versus key person life insurance
When most company leaders think of purchasing key life insurance coverage, they turn to life insurance. However, industry leaders point out that the chance of losing a key person to disability is 17 times greater than losing a key person to death, and the cost of hiring a recruiter to replace the person and training them for a short period. It could be much higher than finding a permanent replacement for the key life person.
Considerations before purchasing key person life or disability insurance
Requirements and coverage options
To obtain key person disability or life insurance, the individual must be a consenting employee, and you must demonstrate that the company would incur substantial financial loss without this employee. To qualify as a key person, most insurers require that the employee salary is in the top 20% of the business. All key person life insurance policies are written specifically for the employee in question. Contact Songer Benefits today to learn about coverage options, limits, and other plan details.