From hiring and firing to training and ensuring you are profitable, it is easy to see why most business owners are overwhelmed. Thankfully, there are ways to reduce your stress and manage a successful business, especially if you rely on specific employees for your company's success. A key-person insurance policy can be a great investment for your business. This type of insurance insures a key employee, paying you and your business in the vent of this key employee's death.
This guide will help you understand the benefits of a key person insurance policy.
Compensate for Lost Revenue
Depending on the nature of your business, you may rely on a key employee who brings in the most revenue. For example, a head mechanic or top salesperson may have helped and continue to help your business be successful by bringing business and sales. The loss of this key employee will not only be emotionally devastating but also financially devastating for your business.
If the key person passes away, the insurance company will pay the beneficiary (you and your business) the death benefit. While it will not help with the emotional loss, the death benefit can compensate your business for any revenue lost because of the key employee's death.
Compensate for Bills or Loans
If the key person's loss affects your business' ability to pay basic business expenses, bills, or loans, the insurance policy can also be beneficial. After the key employee's death, the death benefits paid to the business can be used to not only compensate for the lost revenue but to also provide you the financial means to pay your business expenses. This ensures your business will stay somewhat afloat even though the business has taken such as large financial loss.
Pay for Training or Replacement
A great deal of time, energy, and money will be necessary to find a suitable replacement after the death of a key employee. Unfortunately, you and your business may not have the time or financial means to do so without having a key person insurance policy in place.
The death benefits paid out after the loss of your key employee can be used to advertise the new employment opportunity and to spend time and energy training your new employee. While they cannot be replaced emotionally, the key person can be replaced in regards to your business.
There are many types of insurance policies available, but specific types of coverage can be beneficial to your business. Contact services such as Welsh Insurance Agency Inc. to learn more.
Share16 July 2019
Ten years ago, I married my best friend in a beautiful, intimate ceremony. My husband and I have been nearly inseparable and we’ve enjoyed this special time in our lives where it has been just the two of us. However, we’re finally ready to have a baby. Because I only work part-time, my husband is the primary financial provider in the family. If something ever happened to him, I wouldn’t be able to instantly support myself and a child. Because my husband worries about an uncertain future, he is considering purchasing a larger life insurance policy. On this blog, I hope you will discover the best types of life insurance policies for young parents to invest in. Enjoy!
