Planning

What is Key-Person Life Insurance and How Can It Help Ensure My Business Thrives In Challenging Times

It’s no secret that the majority of business owners hold a considerable percentage of their net worth within the value of their business.  The business’s ability to succeed not only impacts the owner, but their dependents as well. With so much riding on the continued success of your business, have you considered how its profitability will be impacted when a key employee unexpectedly passes away?

 

While we would like to believe our company’s success is greater than the product of one employee; a careful audit of success-factors will inevitability point to a small handful of employees directly responsible for its overall profitability. Without this employee, processes fail, the customer experience deteriorates, and new customer acquisitions dramatically lag.  

 

Key-person life insurance enables the business to hedge this risk at a relatively low cost as compared to the lost revenue, time and productivity resulting from the loss of this key corporate asset. By insuring the life of this top-performer, the business is able to:

 

·      Stay afloat while a suitable replacement is found and properly trained.  

·      Receive an infusion of cash to make up for the lost revenue traditionally generated via this employee.

·      Ensure short-term financial obligations are capable of being met during this period of transition.

 

Families insure their primary wage earner to properly address how they will maintain lifestyle and meet financial obligations for years to come after this individual passes. Key person life insurance affords business owners the same protection.

 

For more information, or to schedule a complimentary consultation, please contact Long Lake Planning at 215.309.3839.