Business Perpetuation, Succession and Key Person Insurance

One of the primary ways businesses fail is due to poor planning.  It can get so busy in the day to day work, that there can be failure to pause and evaluate the threats that face businesses:

  • Do you have an employee or multiple employees who have a significant impact on whether you succeed or fail as a business?
  • Would your business take several steps backward if a key employee was to leave the organization?
  • If a key employee was to pass away, what type of impact would that have on your business?
  • As a business owner, what happens to your business and your employees if you were to suddenly pass away?

The answers to these questions help determine the best process of managing your risk.  The goals that you have for your business and your key employees help determine the best way to approach these threats:

You can use the tools of key person coverage to accomplish your goals such as:

  • Providing life insurance protection on a key employee with a component of cash value that builds for that employee as long as they stay with your organization.
  • Providing life insurance protection on a key employee who is committed to the organization long term, but if they were to pass away would have a catastrophic impact on the business.
  • In a stock purchase scenario, use life insurance to ensure that the purchase will not be stopped by the passing of the purchaser.
  • And a combination of any and all of the above.