The loss of an employee can be devastating in many ways. However, as a business owner, there is a type of insurance that you can purchase that helps to ease some of the stress that this may cause on your business. With key person insurance, your business can better deal with your employee loss.
Who Is Considered A Key Employee?
Anyone deemed as a essential to running or making money in order for a business to be successful, is deemed as a key employee.
How Does Key Person Insurance Work?
With key person insurance, business owners will pay a premium for their key employee/s, which will help to ensure the business can succeed with the loss of these key employees up until the business can regain its footing again.
Depending on the type of policy that a business owner purchases, a key person insurance policy could be considered an employee benefit, which builds up cash value during an employee’s time at the company.
With some key person insurance policies, the employer may agree to give a percentage of that cash value to their employee, but it would not be received until their retirement. This can help to encourage an employee to stay with the company longer.
Talk With Your Insurance Agent
Be sure to consult with your insurance agent in order to determine if a key person insurance policy is right for you and your business, providing you with the essential information on how key employee insurance works.