How to Insure a Valuable Employee

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What could happen to your company if a key employee dies?

• You may suffer a loss of sales.
• You may suffer a halt to projects.
• You may suffer a halt to credit extended by important creditors or clients.
• You may suffer a loss of momentum.
• You may incur additional costs to recruit and train a replacement.

How do I insure my business against the death of a key employee?

You can purchase life insurance for the key employee using corporate dollars. Your company will receive several benefits such as:

• having the funds available to recruit and hire a replacement employee;
• acquiring an income tax free source of cash to help offset lost profits; and,
• securing a means to assure customers and creditors that business will continue with as little disruption as possible.

What if I insure my key employee and the employee lives until retirement?

While the key person works for you, the life insurance can still be valuable. The cash value life insurance can:

• provide a reserve fund;
• reinforce your business' credit worthiness;
• strengthen your key employee's loyalty; and
• (at retirement) be used to create or supplement a retirement income.

Please refer to Key Life Insurance-The Basics. for a basic outline about implementing a plan.

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