Key person life insurance is beneficial in various scenarios:
- If your business's reputation and financial health are closely tied to a key employee's name, reputation, or unique skills, and their loss could jeopardize the business.
- If the death of a key employee, such as a top salesperson, could quickly threaten the company's financial stability.
- If a financial institution or other creditor requires collateral for a business loan and insists on the option to place a lien on a key person policy (known as collateral assignment).
- If your business is a partnership and each partner wishes to have the option to purchase the other's shares in the event of an unexpected death.
