What is Keyman Insurance?
Keyman insurance is life insurance on the key people in your business, from owners, partners and founders to key employees.
Why is it important?
If an owner, founder, partner or key employee suddenly dies, the consequences can threaten the very existence of the business. For an owner or partner, you are now faced with the estate of the deceased partner. Essentially your new partner is the spouse or family of the deceased. It is not what most business owners had in mind. However, you must compensate the estate of your partner in order to assume his or her ownership interest. Rarely is there available cash on hand to do so.
An adequate life insurance policy would immediately pay the estate in return for the deceased's share in the business being delivered to the surviving owners. The same protection can be secured for a key employee whose work and expertise were essential to the operations of the business.
Disclosure: CBA is a social enterprise that receives affiliate or broker commissions from companies that provide financial wellness products and services and other benefit programs to our members. A minimum of 10% of all CBA profits are directed to youth education initiatives.