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Benefits Of Key Person Insurance

If an insured employee or owner were to pass away or become disabled and unable to work, the benefits payable from a key person life or disability insurance plan could help you to:


Recruit, hire and train a replacement

Manage Payments

Pay off debt and manage creditors

Company’s Financial Health

Ease lenders’ concerns about your company’s financial health

Business Survival

Reassure customers, employees and investors that your business will survive

The Right Choice If

  • Your business employs someone whose contribution to the company cannot be easily replaced

Plan Summary

Key Person Life Insurance

  • A wide range of coverage amounts are available
  • Choose from term and permanent life insurance
  • Life insurance proceeds are tax-free

Key Person Disability Insurance

  • Ages 18-55 eligible to be insured
  • Policy can be maintained until the insured turns 62 or leaves the company
  • Benefits range from $2,500-$15,000 per month for 12 months
  • Benefits can start after either 60 or 90 days of total disability

The information above is a summary only. Please see a sample policyOpens PDF in new window for complete details on terms and conditions, including benefits and exclusions.

Key Person Insurance FAQs

Find answers to your questions about key person insurance.

A key person is an employee or a business partner/owner whose skills and intellectual capital are so valuable that your business would suffer substantial financial losses due to that person's death or inability to work due to a disability. This person has knowledge, skills or talent that few others can duplicate. The industry he or she works in, or the nature of the work, may be so specialized (such as research or design) that there are few others with the skills needed. In addition, the unique skills held by a key person may not have been acquired through education or experience but through their own creativity, talents and interests.

Key person insurance can provide your business with the working capital it needs to keep operating and to fund the recruitment and training of a replacement should a key person pass away or become totally disabled. If the key person is the most significant contributor to your business, your company may not be able to continue operating without that person. In that case, key person insurance could compensate you (or your other business owners) for lost income should your business have to close.

This depends on the type of life insurance plan you choose for the policy. For example, term life insurance can provide coverage for 10 or 20 years at a time. However, a permanent plan like universal life insurance could provide protection for the entire lifetime of the insured person.

The key person disability insurance plan offers coverage until:

  • The insured person reaches the specified age stated in the contract; or
  • The date the insured ends active full-time employment for any reason other than total disability; or
  • The date the maximum benefit period has been met for any one period of total disability; or
  • The date benefits become payable under the replacement expense benefit provision

Under the key person disability insurance plan, "total disability" means that because of injury or sickness, the insured person is under the regular and personal care of a physician and is unable to perform the important duties of his or her regular occupation.

Want to Know More?

Ask us how key person insurance can help protect your business.

Discover & Learn

The information above is a summary only. Please see a sample policyOpens PDF in new window for complete details on terms and conditions, including benefits and exclusions.