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What Is Key Person Term Life Insurance?

Feb 9, 2008
What is Key Person Term Life Insurance, and what does it mean for a business?

Small businesses play a large part in our economy by keeping money flowing through our systems of commerce. Small businesses can often require a great deal of help after dealing with the loss of someone who is vital to the company. Luckily, there are options available that can make this transition less difficult, which makes them well worth learning about long before you ever have to use them.

Key Person Term Life Insurance

In small and medium sized businesses, a "key person" may be the business owner, a top-notch sales representative or the person who is charge of doing the business financing or accounting. What would happen to that company if one of these people were to die suddenly? More than likely, there would be a significant rough period of transition while the business struggled to locate a viable replacement. If the owner should happen to be the person who passed away, the company very well may expire right along with him or her. Losing the top sales person could mean losing important accounts or struggling to keep the business afloat.

Key Person Term Life Insurance Protects the Key People in Your Organization

The key person, simply put, is someone who is absolutely vital to the health of the company. The key person is someone who cannot easily be replaced, and whose knowledge and understanding of the company is truly the key to its survival. By failing or refusing to recognize how the death of this person may impact your organization, you may actually be setting yourself up for serious failure. It really only takes a couple of steps to ensure that your business will always be prepared for the loss of someone crucial or vital to the company's success.

Key Person Life Term Insurance for your Company

There are many advantages to even consider a special key person term policy called, no medical life insurance, for your company or simply a standard term life insurance policy. Key person term life insurance can allow a business to establish a continuation plan should they ever lose a vital part of their company. It can also provide the economic means necessary to find a replacement and to give the replacement all of the tools and training that are needed to fulfill whatever duties were conducted by the departed. Key person term life insurance can also be utilized in order to pay existing debt off so that an orderly transition may take place. If you want to make things run smoothly in your business, even if someone vital to the company should happen to pass away, then key person no medical term life insurance is absolutely the only option for you to consider.

Is Obtaining Key Person Term Life Insurance Important for You and Your Company?

In situations where the passing of an owner would otherwise lead to the death of the company along with him or her, this type of insurance could really be a lifesaver. The need for key person no medical term life insurance really depends on what your individual circumstances are, but it is something that you need to consider at length before any decision is ever made. If your business relies heavily upon you, or certain key associates within your firm, you really do need to figure out what it is that needs to be protected and how to go about ensuring that your business will continue without its key people.
About the Author
Sharon Taylor writes life insurance articles for eQUOTE Life Insurance, offering low rates, no-obligation quotes, and term life insurance information. Providing financial security for American families online since 1999.
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