Key Person Insurance for Businesses
Many businesses rely heavily on one or two key individuals. Key person insurance is designed to help protect a business financially if a critical employee, owner, or partner passes away or becomes unable to work.
Protecting the Business from Unexpected Loss
Key person insurance is a type of life insurance owned by a business on the life of a key individual. If that individual passes away, the policy pays a benefit to the business, which can be used to help manage financial disruption.
This coverage is designed to support business continuity during a challenging transition period.
Protection for Businesses with Critical Team Members
Key person insurance is commonly used by businesses where the loss of a specific individual could significantly impact operations, revenue, or leadership.
- Small and mid-sized businesses
- Closely held companies
- Professional practices
- Partnerships
- Businesses reliant on key executives or owners
Supporting Business Continuity
The loss of a key individual can create immediate challenges, including lost revenue, operational disruption, and uncertainty for employees and clients. Key person insurance provides financial support that may help the business remain stable while planning next steps.
- Helps offset lost revenue
- Supports business operations during transition
- Provides flexibility for hiring or restructuring
- Helps reassure employees and stakeholders
A Business-Owned Protection S tragegy
In a typical arrangement, the business owns the policy, pays the premiums, and is the beneficiary. Coverage amounts and policy types are selected based on the individual’s role and the potential financial impact of their loss.
Policies are designed to align with business needs and should be reviewed as the company grows or changes.
Education-First Business Guidance
We help business owners evaluate whether key person insurance is appropriate, determine reasonable coverage amounts, and understand how this coverage fits within a broader business protection strategy.
- Education-first, no-pressure conversations
- Help identifying key individuals and coverage needs
- Coordination with life insurance and business planning
- Ongoing reviews as the business evolves
Part of a Broader Protection Plan
Key person insurance is often used alongside other business protection strategies such as group benefits, buy-sell planning, and executive benefits. A coordinated approach helps ensure coverage supports long-term business goals.
Common Key Person Insurance Questions
Below are answers to some common questions business owners have about small business health insurance.
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Who qualifies as a key person?
A key person is anyone whose loss would significantly impact the business, such as an owner, executive, or top revenue producer.
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Who owns and benefits from the policy?
Typically, the business owns the policy and is the beneficiary.
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How is the benefit used?
The business may use the proceeds to support operations, offset lost revenue, or fund transition plans.
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Should key person insurance be reviewed over time?
Yes. As roles and business value change, coverage should be reviewed periodically.
Protect the Business You've Built
If your business relies on key individuals, a conversation can help determine whether key person insurance is appropriate and how it fits into your overall strategy.
