Key Person Benefits

Key Person Benefits

Provide extra financial security and protection for key executives and your company.

Typical group life and disability insurance offered to employees only covers a fraction of a key executive’s high income. Providing an enhanced, customized benefit package to wrap around the group plan for key executives not only protects the executive and his or her family, but also the business in the event of a sudden critical illness or death. Executive benefits can include supplemental life insurance and disability, and plans may be structured to avoid taxation of benefits at the time of claim.

Key Person Life Insurance

Key person life insurance is designed to protect your business should one of the main partners or executives pass away unexpectedly. Premiums are paid by your business and your business is the beneficiary. Benefits and premiums are tied to the value you have established through financial records. Benefit payments made to the business help minimize the financial loss of losing the key person due to death.

Business Overhead Disability

Business overhead disability policies pay the company’s overhead expenses when the owner is unable to work due to a disability. Often the owner generates income and operates the business, so without a business overhead disability policy, the business might be forced to close because it can no longer afford to pay its overhead expenses. These types of policies typically pay for expenses such as employee salaries, rent, and utilities, among others.

Buy-Sell Agreements

Buy-sell agreements, or continuation agreements, are used to protect a business after the death of an owner. They are tied to and funded by life insurance policies. The parties to the agreement, usually the owners and their partners or successors, determine the best course for transfer of the ownership interests in the business upon an owner’s death, disability, or retirement. The other owners, partners, or successors purchase insurance coverage that pays the benefit upon the triggering event, namely death, disability, or retirement, and the benefit is used to fund the purchase of the interests. This benefits the retiring or disabled owner or his or her estate, because there will be money to purchase the interests and provide for retirement, care, or his or her beneficiaries, and the other parties because they can retain control of their business as planned.

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