Key Person

Many businesses have one or a handful of owners, partners, or key employees who are essential to its success and, in some cases, to its survival.

Key person insurance is a policy taken out by a corporation or business on the life of a key employee to protect the business in the case of a sudden death. The key employee can be anyone whose loss would be significant to the company or could result in a loss of business. Typically, the business is the sole owner and beneficiary of the policy.

The income tax-free death benefit paid out by the policy may be used to :

• Replace lost profits
• Recruit and/or retain qualified replacements
• Protect the company’s credit position

Key person life insurance is critical for a business and simple to implement. It does not require IRS approval and may include any number of people. It may also be set up to provide a death benefit only, provide additional cash value for future cash flow needs, pay out retirement benefits, or fund unexpected expenses.

At EPIC, we have access to a wide array of insurers and 20 years of experience in business succession planning. Contact us for more information about obtaining a key person policy for your business.