Key Man Insurance 

Key man insurance is a type of life insurance aimed at the business world, where one person’s skills and abilities can make an enormous financial difference. If a large portion of your business hinges on a few key people, you should give some thought to key man insurance.

Who Needs It?

Key man insurance is meant to cover the company’s losses in the event of the death of a key employee. That employee may be a particularly capable sales person, a manager, or the company owner, the underlying assumption is that the company will suffer greatly should that person pass away.

What Is It?

Key man insurance is generally a term life insurance policy, with the term length being the time until that employee retires. The company pays the premiums on the policy and receives the death benefits if the employee dies unexpectedly. If the employee retires, the company may choose to surrender the insurance contract, giving the employee the chance to convert the policy to a permanent one. 

How Much to Cover for?

Losing a key employee can harm your business in a number of ways. Your key man insurance policy must provide enough coverage to account for all costs associated with such a loss. This loss is expressed not just in immediate loss of profits or revenue; the company must also bear the costs of hiring temporary replacement staff, of conducting the search for a suitable replacement and the new employee’s training.

For more information about this type of business insurance, visit or call us at SASCU Wealth.