[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.
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.
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.
Investopedia: Will Insurance Keep Your Business Safe?