As with life, the business can be unpredictable. In preparation for the unexpected, business owners protect their companies with various insurance products such as property and casualty which are two of the most common coverages. Yet, employees are also assets which keep a company successful and the loss of a key member can be hazardous to a company’s future. With a key person fraternal benefit society insurance policy, a business would be protected from financial loss in the event of an executive’s untimely death. Business owners may want to consider why this coverage makes sense for them.
Key person insurance enables continuity for a company. Insurance coverage for a key employee provides funds which can support the recruitment and training of a suitable replacement. This would assure employees, clients, and vendors that the business will continue uninterrupted and financial obligations will be fulfilled. Additionally, the family of a key employee would receive any owed compensation or deferred benefit.
A key person policy is a type of fraternal benefit society insurance which is typically used for those who perform an irreplaceable role and vital to a company’s operation. This could be the owner or a senior manager such as a sales executive or director. While it’s a decision for the company owner or an executive board can make, advice from an objective professional insurance agent can be helpful.