Nobody wants to contemplate the death of one of your business leaders or experts. However, I'm sure you can think of a couple of people in your company who are essential, and maybe one of them is yourself. A smaller company probably carries even more risk, and many small businesses really revolve, and derive most of their value, from one or two people. However, even larger companies are lead by a small group of people, and their absense would impact performance.
Many companies consider Key Man Insurance to ensure the livelihood of the company. In the event of the death of key personal, the money can be used to pay off debt and keep creditors at bay, find a replacement for the deceased, buy out the deceased's shares in the company (buy-sell agreement), or even help to supplement the income of the deceased's family.
All key man insurance really is - is a life insurance policy - usually a term life insurance policy based on the estimated working years of the key people. You shouldn't just consider upper management for key man life insurance. Key technical people who would be expensive to replace should also be considered.
I worked at one techincal company, and a fairly young (49 years old) technical leader went home one week-end. He died of a heart attack on Saturday night, and did not return on Monday. In addition to the shock and grief we felt, our project team lacked its technical leadership. We needed time to train for his share of duties, and to hire outside expertise.
Get Quick Life and Key Man Insurance Quotes Here
Tuesday, April 10, 2007
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