Key Person insurance for life and long-term disability income for major employees,with benefits payable to the business.
Key person insurance has these advantages:
(1) Enhances the ability of the business to continue operations
(2) Fosters smooth sale of a going business between an estate and a purchaser by providing funds to buy out the interest of a deceased key person
(3) Encourages key employees to stay on the job
(4) Attracts new key employees
(5) Provides funds for expenses of hiring and training of a replacement key employee
(6) Provides a line of credit, a permanent life insurance policy has cash values that are available for loans at advantageous rates.
(7) Policy proceeds, which are income free, are payable even if the key person is no longer in the employment of the business at the time of death; however, the business must continue to make the premium payments after the key person leaves the employment
(8) A life insurance policy can be surrendered for its cash value or sold to the insured key person; thus, the business will usually at least receive the return of premiums.
(9) Long-term disability income insurance on a key person also provides funds for salary continuation to the disabled key person. (For temporary disability, the business might prefer to self insure because the expense of premiums for this coverage is generally excessive when compared with the potential income benefits.)
Battistone Insurance Group