Day-to-day business operations are often guided by several key employees. Their knowledge and skills contribute to efficiency, morale and most importantly, income. If a key employee falls ill, becomes disabled or dies, your business’ profits can suffer without their continued guidance.
Key employee life or disability insurance will compensate your business in the event of the loss of insured key employees. In most cases, the business owns the policy, pays the premium and is the beneficiary. However, key employees must give their consent before being insured.
Did you know that employees are at a greater risk of becoming partially, totally or temporarily disabled than they are of dying? It’s important to consider disability insurance alongside life insurance for this reason. Permanent disability can cause the same profit losses as death. This type of insurance protects a business from this risk by paying between 40 and 70 percent of the disabled employee’s earned income.
The amount of coverage you need is determined by each unique situation. Speak with an independent agent about your options. He or she will take the time to learn about your key employee’s age, health and role within the company. This will determine whether you should purchase key employee life insurance, disability insurance or both, and will also reveal the premium cost once a policy is chosen. Your agent is there to guide you through the entire process of choosing insurance, including shopping for policies.
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