What is Key Man Insurance?


Key man insurance is life insurance coverage that is purchased by a company or business to help insure the life of an employee they consider to be an integral part of their survival. Key man insurance may help provide companies with the time and funds needed to stay functional while they work to replace the deceased employee.

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 Who Can Buy Key Man Insurance?

A business that has employees who are a vital part of the company’s survival may want to consider key man insurance. Some businesses may not be able to still be successful if a key employee were to pass away because of the training, specific skills, knowledge, contacts and business relationships they are acquired.

 Who Would Qualify as a Key Man?

This is something you should probably ask your boss. But generally speaking, it is astaffer or executive who typically possesses certain specialized knowledge, skills, or connections that are crucial to the continuance of the business and may be very costly, not to mention, hard to replace.

 Different Kinds of Key Man Insurance

A company may be able to purchase any kind of policy that is available for households to purchase. Term life insurance may be attractive due to the fact that the key employee’s employment would end via retirement and term life insurance may be among the most competitively priced. The cash value life insurance may be liquidated  or cashed out in the case the key employee leaves or is terminated.

 What Happens If My Key Man Quits?

Depending on what specific policy you purchase, key man life insurance may provide the needed funds to replace them, even without the passing of the key employee. A cash value life insurance policy can generally build up equity value, from the premiums and interest paid into the policy. You may be able to cash out the policy or liquidate it at any time and for any reason. The equity amount in the policy will usually be smaller than the policy’s death benefit, but it could still provide you with additional funds. For more information, please see “What Can I Expect from Cash Value Life Insurance?” 

 Can a Business Really Take Out Life Insurance Policies?

Businesses may own life insurance policies, but not just for protection. They may use life insurance as potential employee benefit and to fund buy-sell agreements that can have tax advantages.

 How You Can Buy Key Man Life Insurance

If you would like to shop for key man insurance by yourself or are just interested in comparing prices, you can fill out this quote form located on this page with information on the employee that you would like to insure. If you find a quote that you like, you can begin the application process online. Remember, there is never an obligation to purchase this insurance from us, even after completing an application.

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"Did you know that since 2005 the percentage of U.S. adults without life insurance has nearly doubled?"*