Key person insurance, sometimes called Keyman insurance, is an important tool of business insurance. In general, it is an insurance policy that can be taken out by a business, not a person, to compensate that business for financial losses that nay arise due to the untimely death or extended incapacity of an important member of the business.
Simply put, key person insurance is a standard life insurance or trauma insurance policy that is used for business protection purposes.
Key person policies are usually owned by the business and the aim is to compensate the business for losses incurred with the loss of one of the key income generators. It helps the continuity and longevity of the business. Key person insurance compensates the business with a fixed monetary sum as specified in the insurance policy.
No business should be without Key Person insurance.
I wish I would have known about this insurance before the timely death of my mom. She had a very lucrative business, but when she passed away, so did the business.