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Key Man Life Insurance

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If you’ve started a company from the ground up and are crucial to its survival, you need to start thinking about what would happen if you were no longer around to run it.

Key Man Life Insurance
Who Needs Key Man Life

Who Needs Key Man Life Insurance?

Key man life insurance is an interesting form of protection. Back when individuals would spend their entire lives with one company, this type of life insurance would have been an essential component for a few members of the company. Which only makes sense: if you grow with your company and have been there since the beginning, your role in the company’s development is much more crucial than someone who was hired within the last month. These days, individuals are more comfortable with moving and changing careers and companies – it is unlikely that an individual will stay with a company for his or her whole life. But that doesn’t mean that key person life insurance should be obsolete. In fact, if you’re an entrepreneur or are the founder or owner of a small-to-medium-sized company, you will need this kind of life insurance to assure that your company continues to grow and thrive after you can no longer run it. If you’re the key person of your business, your health is tied directly to the health of the company.

Key person life insurance helps keep your business afloat in three ways:

Benefits Pay for Business Operations

Benefits Pay for Business Operations.

If you’re gone, key person life insurance can help offset the costs of recruiting, hiring, and training a successor to your position. This allows your company to transition smoothly and won’t take away from valuable time and profits necessary to keep a business running.

Ensures the Survival of Your Company

Ensures the Survival of Your Company.

Key person life insurance is typically included in a lot of buy-sell agreements, which allow your co-founder or a majority shareholder to buy out your position should something happen to you.

 

Protects Your Family

Protects Your Family.

Key man life insurance is not a stand-alone policy, and you will need a personal policy to provide financial stability for your family. However, key man life insurance can help protect your family after you’re gone.

 

Shopping for Key Man Policies

Before you begin shopping for a key man life insurance policy, it is important to sit down and assess your company’s financial future and to know which kind of policy you should get. For example: whole life insurance, or insurance that remains throughout your whole life and builds a cash value, may be a good choice for your personal life insurance, but should not be your go-to for key person life insurance.

Because key man life insurance is meant to assess the short-term needs of your company, you will be better off choosing a term life insurance policy. These types of policies are less expensive and provide adequate benefits to protect your company’s bottom line. You may want to look for a buy-sell agreement with key man life insurance included. These types of agreements are best for companies with more than one key person.

If you or your co-founder is unable to run the company, this type of policy will allow the company to transition smoothly to the healthy party, minimizing financial damages.

 

Shopping for Key Man Policies
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When purchasing life insurance, we always want to choose the coverage amount that will be most useful to our family and loved ones in the future. When we wish to begin the application process for any type of life insurance, however, there are various factors to consider.

At My Term Life Guy, we assist each individual or family in determining the best plan for their needs. We understand that, in many circumstances, a person’s health status might be a barrier to getting traditional life insurance at a reasonable price. In order to receive a plan that offers good coverage, most life insurance companies require a medical exam. The truth is that undergoing a physical exam may be counterproductive if you are looking for a cost-effective plan with enough coverage in the future.

Even if one’s current health is strong, one’s lifestyle or previous illnesses can have an impact on future final expense insurance. If you are not a regular exerciser, a smoker, or have had a significant illness, it is conceivable that the life insurance company may not offer you the plan that you desire. If you also try to hire a policy that offers a lot of coverage while also not having a good medical history, the cost may end up being too high.

Although obtaining life insurance without a physical exam can be pricey, at My Term Life Guy, we will do everything we can to find the best insurer offer for you. The best part about working with us is that we will strive to put ourselves in your place in order to propose the best solution for you, whether it is term life insurance or guaranteed issue life insurance. Furthermore, you will not be required to pay anything to begin the application process, allowing you to compare quotes from several types of life insurance to determine which one is best for you.

You can obtain a quotation by filling out our online form. Please do not hesitate to contact one of our insurance agents if you have any questions!