Does Your Small Business Need Key Person Insurance Protection?

Take a good look at your business and determine if you have key people who are irreplaceable or whose contributions are so crucial that without them, the business might just fall apart. While large businesses often have many experienced executives that could take up the slack, most small businesses depend on a few individuals to make the business work. This is why key person insurance protection is especially important for maturing small businesses.
How much insurance you purchase will depend on your financial needs balanced against what you can afford in premiums. Like other types of life insurance, the higher the face amount, the higher the premium. Term policies are usually the best way to go and will have lower premiums than whole or variable life policies. But consult with your insurance professional to see what types of insurance provide the most flexibility for your business and industry.

Game Plan

Typical key person insurance payouts run from $250,000 to $1 million. Estimate your financial losses if you were to lose a key person and then compare premiums for that amount. Work with an insurance broker to find the right balance for your business needs.
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