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Key Man Life Insurance // How it works and costs 2021!



As a small business owner, it is natural to worry about the health of your employees for more than one reason.

At the financial level, should one of your founders or employees die unexpectedly, you may be left without a key member of your team.

  Nyckelmansförsäkring

Nyckelmans livförsäkring is a way to reduce the burden of that loss. Today we have compiled a guide to help you learn more about how key insurance works and what it costs.

What is Key Man Life Insurance?

Key man life insurance is a common form of business life insurance (COLI). It is also commonly known as key insurance or key person insurance.

It protects your business if one of your top employees – known as a "key person" in the policy – dies. You can sign a key person policy on all members of your team – even yourself.

Basically, you take out life insurance (or, in some cases, disability insurance) on key members of your organization.

These members become insured, but your company is the recipient, as opposed to a loved one. Your company also owns and pays for the insurance – not the insured.

This type of insurance is designed to prevent financial loss while seeking or training a replacement for the lost employee.

Life insurance easy.

Agents not required.

Get a quote and register online without talking to an agent. But we're here if you need us.

Indefinite, expert advice.

Get impartial insurance training from licensed experts and also avoid dubious sales calls.

Coverage in minutes.

You can get life insurance coverage within minutes of receiving your quotes and application.

When would you need key insurance for men?

Your company depends on your employees. Your business would not exist without them – especially your key employees.

Think of the person your company trusts the most to stay afloat. Someone with whom you have invested time – perhaps even years – in education who has a high level of responsibility.

Ask yourself:

  • If this person was no longer in my company, could I keep my business running?
  • Should my customers and clients seek services from competing companies?
  • Do I have someone who could take over their role immediately?

Remember that it takes a lot of effort and money to find the right compensation for such a key person. During that time, you risk losing significant profits or even your business.

If you have one in your company, you have a key employee – and if you have a key employee, your key man probably needs insurance.

Many banks also require your company to purchase key personal insurance to obtain approval for a loan or credit.

Key Man Insurance Vs. SMB Livförsäkring

You may be wondering: "What is the difference between key insurance and life insurance for small businesses?"

Simply put, key insurance is mainly about death benefits, while small business insurance is about a larger number of risks.

Small business handles:

  • Competing companies that poach employees
  • Employees become disabled or unable to work due to other events
  • Relatives of deceased employees who want to sell their share in the company

Small business insurance offers some possible solutions to these issues, such as:

  • Benefits for senior executives, including life insurance
  • Key insurance for the disabled
  • The possibility of liquidating business assets to protect personal assets
  • A purchase / sale agreement, where joint business partners buy each other

Essentially, key personal insurance is a form of life insurance for small businesses. It is up to you to assess whether your company is facing additional employee-related challenges.

If this is the case, it may be worth considering a more comprehensive life insurance for small businesses or multiple insurances.

How much coverage do you need?

In general, there is no set rule for how much key insurance you need.

After all, it is difficult to put an exact dollar amount on a person's value to your business.

Life insurance companies can make this easier by providing preset formulas.

  key person's life insurance

If they do not, you want to look through your records and see how much revenue the employee has generated for the company, such as total sales, positive customer reviews and customers

You must also get the employee's consent before you buy key personal insurance due to the Pension Protection Act of 2006, which prescribes employers to inform employees about life insurance under their name.

When talking to your employee, it's a good time to discuss their value to the company.

Cost of Key Man Life Insurance

The cost of key man life insurance will vary depending on the plan in question. The premium can go up or down depending on whether you buy longevity, longevity or a variable plan.

Lifetime plans generally offer the best value because they have lower premiums. First, determine the general interval for how much you need the plan to cover.

Then it is wise to ask for a quote for each plan amount, such as the premium for a key insurance plan valued at $ 100,000 versus a plan valued at $ 250,000.

Finally, keep in mind that all premiums you pay on key life insurance plans are not deductible on federal income taxes, according to the IRS.

Life insurance is made easy.

Agents not required.

Get a quote and register online without talking to an agent. But we're here if you need us.

Indefinite, expert advice.

Get impartial insurance training from licensed experts and also avoid dubious sales calls.

Coverage in minutes.

You can get life insurance coverage within minutes of receiving your quotes and application.

Taking Action

In the aftermath of an employee's death, you may be emotionally devastated and unable to cope with the sudden financial hardship resulting from the loss of an important worker.

Planning for your company's financial future means that you are prepared for a tragic loss.

Key insurance is one way to do that.

If you need a key person's life insurance, you can get immediate quotation and coverage by clicking here or on one of the buttons above.


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