Key-Person Insurance Can Protect Crucial Employees

Have you ever wondered how your business would be impacted if something were to happen to one of your key employees?

Do you have an employee who has a special skill set or trade? How much would it cost your business to hire or train another employee to do the same job?

Life insurance can be used in many ways, but oftentimes business owners don’t realize that it can be used to protect their business if something happens to one of their employees. This is commonly referred to as key-person insurance.

A business owner will take a life insurance policy out on an employee, usually paying for the premiums with company dollars. The employee would be the insured on the policy, but the main difference on key-person policies is that the business is actually listed as the beneficiary.

If the insured passes away the business will receive the death benefit amount tax-free, which provides immediate cash flow to the business so it can continue to operate normally.

The money can be used to compensate for lost revenue, to train another employee, to purchase additional equipment or machines, or to hire another employee with the same skill set.

The sudden death of an employee can be devastative to a business, but by using a key-person insurance policy, you can protect your business in the event that something like this does happen.

If you have any questions on key-person insurance in Stafford VA or you need help setting up a policy, please call us today – Tabitha E. Walker Insurance Agency 540.657.5633!

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