Protect Your Business with Key Person Insurance

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

Have you ever wondered how the loss of one of your most experienced and skilled employees could effect the functionality of your business? Productivity and management of work flow will definitely be disrupted which might lead to losses. In short the bottom line may be affected. Today we learnt how a key person insurance can safeguard the financial growth of a business.

Key person insurance protects the business in the event of the death or disability of valued employees. The policy will provide funds in either a lump sum or in monthly benefits, and can be used to do one or more of the following:

• Acquire, employ and train a replacement for the lost employee.
• Restore the company's depleting profits in absence of the key person, such as through lost clients or customers.
• Repay the business's debt or assure lenders of financial continuity.

The key person can be a managing director, computer programmer, an executive or even the owner of the company. The company is the sole owner of the policy and pays all the premiums for the policy.

No wonder now a days many companies purchase key person insurance on the life of a vital employee whose loss could negatively impact their business.

Investopedia: Will Insurance Keep Your Business Safe?

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