What happens to key person coverage after departure?

The bottom line What happens to key person coverage after departure depends on the policy’s ownership and purpose. In the key-person structure described by the State of Idaho Business Portal, the business owns the policy, pays the premiums, and is the beneficiary, so the departing employee is not the policy owner. A departing employee does … Read more

Key person coverage calculation methods compared?

The bottom line Key person coverage calculation methods compared: most businesses size key person coverage by estimating the financial loss a key person’s death or long-term disability would cause, then choosing a method that fits their situation. The business owns the policy, pays the premiums, and is the beneficiary. Banks or government loan programs may … Read more

How to calculate key person life insurance?

The bottom line How to calculate key person life insurance is to estimate the business loss tied to one person’s death or long-term disability, then compare that loss with any continuity or lender requirement. In the Idaho Business Portal’s described structure, the business owns the policy, pays the premiums, and is the beneficiary. A useful … Read more

How much key person life insurance a small business needs?

The bottom line How much key person life insurance a small business needs depends on the financial loss the business would face if that person died or became disabled. There is no universal amount. A practical starting point is to total replacement, lost-profit, debt, and transition costs, then review the estimate. The coverage question should … Read more