Do you need key man life insurance for your business

If you run your own business, then key man insurance is important because the future of your company depends primarily on you or a few other individuals that generate revenues for your business. If anything unfortunate were to happen to you, then the business will be severely jeopardize and possibly leading to the collapse. Key man life insurance is specially designed to protect your business in such scenarios by providing the necessary funds needed to sustain the operations.
Key man life insurance is simply a disability or life insurance policy that you purchase on yourself or key personnel in your business to protect the company in the case of an unfortunate accident or death. Having such insurance of these important employees will give your company much needed stability knowing that the company is covered even if such untimely events happen. This policy could literally be the lifeline that your company needs should an accident befallen on one of your primary executives.
It is be understood that the key person insurance protects the business and not the individual. Most key person policies are bought as joint term life insurance policies between the policy owner and beneficiary. In the event of a claim when the insured is disabled or has died, the insurance will pay the claims to the company and it can be used for any purpose. Money from the claims are used mainly to cover expenses linked with finding a suitable replacement for the deceased or to cover the cash flow for the next few months pending reorganization of the company.
Not every business owner need key man life insurance but if your business will be severely affected by loss of customers or revenue due to the untimely disability or death of one of your employees, then you should seriously consider this policy.