by Peter Schlactus & Adam Rothman [ Back To Table of Contents ]
Today many business owners are learning that key
person insurance coverage will assure the survival of their business
the retention of their best employees.
Key Person insurance, formerly known as
"key man," allows businesses to indemnify themselves in the event that
person dies, retires, leaves, or is disabled. In addition, this versatile policy can encourage key employees to stay with your
company by funding a deferred compensation agreement or a future partnership buyout.
In its simplest form, key person coverage
pays cash to your company, which is usually the policy beneficiary. The key
covered could be the owner or it could be someone critical to the business, such as a manager or even an administrative assistant
who knows everything about how the office runs.
Yet another use for key person insurance
is to pay off company debt. Similar to mortgage insurance, it can pay off a loan
important creditor if the boss dies. Lenders like to see such protection in place because it is good collateral and shows good planning.
Face values of key person insurance can
begin as low as $50,000 and go as high as $15 million, or even higher. Premiums
on the age and health of the key person, as well as the limit of insurance desired. A wide variety of life and disability insurance
carriers underwrite key person coverage, so be sure to inquire about the differences between carriers and their policies.
Peter Schlactus, a Certified Insurance Counselor and Accredited Advisor in Insurance, is Co-President of KBS International Corp., which provides specialized insurance programs, benefits, and risk management services to courier companies and executives nationwide. Mr. Schlactus is available to answer inquiries at 1-888-KBS-4321 or via e-mail at firstname.lastname@example.org.
MESSENGER COURIER MAGAZINE [ Back To Table of Contents ]
(c) copyright, 1999 by KBS International Corp. All Rights Reserved.