Does your business really rely on one or more core employees to keep the company up and running? If you have key workers at your business that act as the glue of your workplace, losing them unexpectedly could potentially cause serious logistical and even financial issues for the company. That’s why you may want to consider looking into Key Employee Life Insurance. For many businesses, the primary purpose of key employee life insurance is to provide the company with an essential safety net in the event of the passing of one of the core employees, without whom the business could face serious troubles. Here’s what your business should know about this type of life insurance and whether you might need it.
Companies That Rely on Key Individuals Could Benefit From This Life Insurance
In most cases, the companies that get the most out of key employee policies are those that depend on one or a few core individuals. In general, these individuals are likely to include:
- Employees with indispensable roles
- Owners or managers
- Top executives
- Other key types of workers considered essential to a company
Your Business Would Be the Beneficiary in Case Your Key Employee Passes
Most key employee life policies are set up to include the company as a beneficiary in the event of a core employee’s passing. In this way, these policies are somewhat similar to individuals’ life insurance policies. You can expect that with a key employee life policy, your company will:
- Cover monthly premiums
- Purchase protections for core employees
- Receive benefits should the employee(s) pass away
You May Require Key Employee Insurance If Your Business Faces Certain Risks
Although all businesses could potentially benefit from key employee insurance, some may require it more than others. For instance, depending on the size of your company and the level of risk you believe it faces, you may need to choose whether a term life policy or a whole life policy is more appropriate. Your business may need key employee insurance more urgently if, without your core employee or employees, the company faces significantly large risks of:
- Potential lost profits or income
- Harm to partnership or shareholder interests
- Burden to business lenders, banks or backers
Many businesses that rely on one or a handful or core employees to keep the company running smoothly may opt to purchase Key Employee Life Insurance as a safety net in the event of a key employee’s sudden passing. If your company depends on a few essential workers and you could face logistical, legal or financial troubles without them, investing in this unique type of life insurance could provide a useful safety net and even help save the company from unexpected ramifications down the road.
About Provident Protection Plus
At Provident Protection Plus, we have served the businesses and residents of New Jersey, New York, and Pennsylvania for more than 60 years. We are a wholly-owned subsidiary of SB One Bank, the region’s premier banking institution, and we are prepared to offer you personal, business, employee benefits, and risk management solutions. To learn more about our coverage options, contact our specialists today at (888) 990-0526.
Social Title: Could Your Business Benefit From Getting Key Employee Life Insurance?
Social Description: For many businesses, having Key Employee Life Insurance can provide a helpful safety net. Learn more about it and whether your business needs it here.