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Key Person Term Life Insurance

When a firm loses a leader or top earner, it can leave an emotional void and mean great financial hardship. Key Person Term Life Insurance helps you compensate for lost income while helping your firm move forward.

How it works: Your firm purchases term life insurance coverage, pays the premiums, and is the owner and beneficiary of the coverage. Upon the key person’s death, your firm receives the benefit, which you can use to help keep the business running. When determining the amount of insurance to purchase, your firm should consider the cost to replace the key person and train someone new.

In the event of the death of an owner or key individual, a key person policy can:

    • Help provide the working capital needed to protect the firm and keep it afloat
    • Offset the costs of lost revenue and recruiting a replacement
    • Provide a respectable buyout for the heirs of a business partner and possibly fund a PR strategy to reassure stakeholders and clients
    • Fund a buy-sell or buyout agreement that outlines what is to happen if a co-owner dies (often recommended by succession experts)

When considering Key Person Term Life Insurance and/or a buy-sell agreement, always consult your legal counsel and accountant.


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New York Life Insurance Company, rated A++ for financial strength from A.M. Best Company (as of 7/22/20), brings financial stability, and the capability to pay policyholder claims.

Underwritten by New York Life Insurance Company (NY, NY 10010) on group policy form GMR. Learn more about each products features, costs, eligibility, renewability, exclusions and limitations. NYL-1885619