Best Key Man Life Insurance Quotes Online
Best Key Man Life Insurance Quotes Online Free quotes HERE
Best Key Man Life Insurance involves the use of life insurance to create immediate working capital for a business to meet immediate cash needs and find a replacement in the event of the death of a business owner or key executive.
When a business loses its sole trader, a key employee, an owner or a business partner, the consequences can be dramatic.
Profits can fall, loans may have to be repaid at short notice or, at worst, the future viability of the business can come under threat.
In a smaller company the effect of a premature death of one of its key employees or shareholders would be even greater. Key man life insurance provides the necessary funds the company needs to cope with a tragic loss.
Key man Life Insurance Insuring Those Who Provide Personal Guarantees
When a business takes out a loan or raises bank finance the lender is quite likely to require a personal guarantee or a charge on their personal property. This especially applies to small and new businesses.
So what happens if these guarantors become seriously ill or die? The lenders may well be in a position to call in the loan. What happens then? Again, Key man Life Insurance is the answer.
Insurance can be structured to pay-off the loan and thus free the business and the guarantor’s family, from major worry..
How much Key Man Life Insurance should we buy?
In order to determine the potential loss of revenue, it is first important to determine the level of influence a key person has on your business. For example, if you have one or two people who are entirely responsible for credit lines or vendors, the loss of one or both of them could endanger the viability of your business.
Businesses of all sizes should have a succession plan in place and as a component of that succession plan, key man insurance should be a consideration.
Regardless of what type of business you have, you could be placing the business, your employees and your vendors at risk for financial losses.
There is no set formula to determine the specific value of a key employee to an organization, each situation is different. From a life insurance standpoint, the basic rule of thumb commonly used is a range of anywhere from 3 to 5 times annual compensation of the key employee. From an underwriting standpoint the purpose of the life insurance is to cover a specific risk not to create wealth for the company.
Where to find the Best Key Man Life Insurance Quotes Online
Insurers do not underwrite key person insurance as a specific product, but frame the policy around a conventional life insurance or living benefit product.
Policies are determined based on the insured age and health. Therefore, if your key man is in general good health, your policy could be quite low. Many businesses choose a term insurance policy over a permanent one due to less of premium. You will find the cost of a policy is much less than the amount you could lose.
For a confidential discussion on key man Life Insurance please call us on 813- 964-7100/ 716-565-1300 or get a free instant quote online
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