Life InsuranceKey man Insurance
What is Key man insurance?
Key man insurance is a life insurance cover which is taken by an employer on the life of its employees. The employer is the policyholder as well as the one responsible for paying the premium. The employee is the life insured. If the employee dies during the term of the policy, the employer receives a death benefit which compensates the employer for the financial loss suffered due to the death of the key employee. The employee covered under a Keyman insurance policy should be the key employee of the business who is instrumental for the success of the business.
Benefits of Key man insurance policy
A Key man insurance policy is considered to be very beneficial for the business because of the following reasons-
1.The policy helps businesses face the financial loss incurred in case their key employees die prematurely
2.The policy gives a boost to the morale of key employees as their importance is outlined through the Keyman insurance cover on their lives
3.The price of the company’s stocks do not fluctuate wildly when the company has a back-up plan in the form of Key man insurance even in case of death of its key employee
