Protect the business
Map the cost of disruption, recruitment and transition. A policy should address a defined cash need, alongside an operational continuity plan.
Business continuity
What would it take to keep going without a key person?
Key person insurance helps a business plan for the loss of someone whose contribution is difficult to replace. Life insurance can provide funds following an insured death. Disability and critical illness protection address different events. The insured person, benefit and policy conditions need to match the risk you are trying to fund.
Start a private conversationSpeak with an advisor, or prepare a brief first.
Before choosing a policy
Four questions
worth asking.
Whose absence would interrupt revenue?
How long would replacing their contribution take?
Which loans or contracts depend on them?
What resources are already available to the business?
Options and tradeoffs
The details
make the difference.
Protect the person’s family separately
A business-owned policy and a family’s life insurance serve different beneficiaries. One should not be assumed to replace the other.
Plan for illness as well as death
Life, disability and critical illness coverage have different triggers. Review each risk instead of assuming one policy covers every absence.
Common questions
A clearer
starting point.
Is key person coverage the same as a buy-sell policy?
They address different needs. Key person protection concerns the effect on the business. Buy-sell funding concerns an ownership transfer under an agreement.
How much key person coverage is needed?
Start with the financial impact of the person’s absence, including lost revenue, obligations and replacement costs. The amount should be supported by the business circumstances and insurer requirements.
General information to prepare for a conversation. Coverage depends on underwriting and the policy contract. Your circumstances require individual advice.
Further reading: Insurance for business owners
A family name behind the advice