Protecting Your Business Against
the Loss of a Key Employee


If the success of your business depends on a few key people…

Key person life insurance can help ensure that your business continues to be successful, even if you lose their expertise.

Business purchases life insurance policy on key employee Life insurance company issues policy covering key employee At death of key employee, income tax-free death benefit paid to business1


The advantages of this strategy:

  • Life insurance lets you reduce, or even eliminate, some of the risk your business may face following the death of a key employee.
  • The costs, expenses, and potential loss of revenue resulting from the death of a key employee are no longer unexpected or unmanageable.
  • Funds are available to hire and train a new employee
  • The plan is completely selective – cover only those employees you feel are most important to the opening success of your business.
  • Life insurance benefits are received income tax-free by the business.1


When the financial soundness of your business is threatened by the death of a key person…


Key person life insurance can provide the protection your business needs to keep going.

Here’s how it works:

  • You and your life insurance professional determine the financial impact the loss of a key employee will have on your business
  • Your company buys, owns, pays the premiums on, and is the beneficiary of a life insurance policy covering the employee’s life.
  • At the death of the key employee, the life insurance policy pays your company an income tax-free benefit.1


Permanent life insurance

  • Death benefit helps keep lines of credit open following the loss of an owner-employee or key employee;
  • Provides funds to replace and train an employee wit specialized skills and expertise;
  • Helps assure completion of ongoing projects and initiatives; and
  • Provides access to policy cash values through loans and withdrawals, which your business can use to meet unexpected business expenses.2



1 Assuming the disclosure and consent requirements of IRC 101j and 6039 are met prior to issuance of the policy

2 Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Surrender charges may reduce the policy’s cash value in early years.