Would losing a key employee cause negative financial consequences for your company?
A National Association of Insurance Commissioners (NAIC) survey found that 71 percent of small businesses reported they were very dependent on one or two key people for their success.
Life insurance can compensate a business for an expected loss of income, or increase in expenses to search for a replacement in the event of the death of a key employee.
Determining the amount of life insurance to buy is anything but an exact science. The contributions made by the employee to the business must be considered. Is the employee producing a significant portion of your sales, or have special technical skills that will have to be replaced?
Almost any type of life insurance can be used to facilitate a key employee life insurance program. In many cases term insurance is used, but in some situations it might be more appropriate to use a policy that accumulates cash. The firm is usually the owner of the policy, however an equitable split of premium payments, cash surrender and death benefit may be agreed upon between the employee and the firm.
An independent agent from Hubbard Insurance Agency can help you make an informed decision, and we provide life and disability insurance to Rocky River and all of Ohio. We care about our clients and take the time to find the best deal for life insurance that truly suits their needs.
At Hubbard Insurance Agency, we consider ourselves the friendliest insurance agents on the planet. You can contact us by email, phone or by filling out our online form. We will make the process easy for you, and we care!
Source: Inside Insurance