A coverage plan is important for a successful business owner, family member or strategic salesperson who is key and central to the continuity of and success of a businesses continuing operations.
Whether they are a partner, stockholder or someone with a high degree of knowledge and expertise, the illness, departure or death of that person could mean financial hardship for your organization if there is no coverage or planning in place.
Call The401Kman toll free at 877-775-0812 to find out about disability coverages and many other insurance, benefits programs, retirement and financial planning services available. Or click on our contact tab to the right to submit your question or request a call at a time of your convenience through our appointment calendar.
Key person coverage insurance is a life insurance policy on a person key to a business. In a small to medium sized business, this is usually an owner, the founder, possibly a key employee or two. These people are crucial to the management or income generation of the business. The very people whose loss would cause a hardship to the businesses continuing operations..
A key persons coverage insurance policy strategy differs slightly from a section 162 executive bonus strategy. A section 162 executive bonus plan is typically an employer financed personal life (or) disability insurance intended to benefit selected employees. Whereas a key person insurance strategy is intended to protect the the business and ultimately the insureds dependents from losses resulting from the employees death*. Both strategies, depending on how they are implemented, can offer income rewards to the employees.
- One of the employee incentive options is to offer this as a retention bonus.