Key person insurance for your business can include many different types of insurance. Common coverages are life, critical illness and disability insurance – all serving an important purpose in security of your business. These policies can be purchased by a company on any employee that is vital to the success of the business operations. If the key person were unable to work due to disability, illness or even death – the financial stability and security of the business and all involved could be at risk. We are going to specifically look at disability insurance for key employees. Ensuring your business has the required funds to cover ongoing expenses if you, your partner, or a key employee are unable to work, is extremely important for the longevity of your company, and the security of all employees. The insurance payout from the policy can help cover your monthly expenses, pay debts, keep the business afloat, and fund a buy/sell agreement. Without this influx of cash, the business may not be able to survive.
Just as individual disability insurance is designed to provide a portion of your normal income in the form of a monthly benefit, a key person policy can do the same for your business. The process from application to expiration follows the same steps:
The needs of each business are unique – and business disability insurance gives you the freedom to choose a plan that fits your specific business’ needs. Whether your business is in the early stages of operation, in a state of growth, or even well-established, it relies on you, and the other members of your team to stay operational. A proper business insurance plan provides security in all aspects of your business including:
Key person protection | Business overhead expenses | Buy/sell agreement funding | |
When is a benefit payment made? |
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When is it the best fit? |
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Coverage details – how long does it last? |
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What benefits does this coverage provide? |
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As a business owner, you can appreciate the time, dedication – and frankly the blood, sweat and tears that go into starting, growing and maintaining a business. With so many different obligations within the business, it can be hard to find the time to properly plan for the “what ifs” that could change the trajectory of your business. Proper business planning involves implementing a comprehensive insurance plan that will protect you, your partners, employees, and as an extension, their families. Taking the time to properly review your business needs can make a world of difference if you, or a key person in your business experiences a disability, illness, or death. You wouldn’t want to leave your personal affairs in a state of disarray, and your business is no different. Our team at Hometown Life Insurance has the knowledge and experience to assist you in understanding and executing on your business insurance planning needs.