The Key Questions
When reviewing key person life insurance, a separate set of key questions often arises that a business should analyze with the help of an independent life insurance professional.
Since every business is different, and because the fallout following the death of a key partner, executive or employee would have different results for each respective company, there are questions of varying importance for every organization that seeks to buy key person life insurance.
The first question involving key man life insurance, despite the differences among so many companies, is the most universal: What would happen if a business lost a key person, a partner, executive or worker?
The loss, though it would vary and presumably be larger (in sheer dollars) for a more established corporation than a small firm, would nonetheless be significant. With that fact in mind, a business must have a strong answer to this next question: How much revenue would a company lose during the period it would take to find another person to fill this key role?
Whatever that sum is, it should be a figure that is as accurate as possible because, without enough key person life insurance coverage, a company can go out of business very quickly.
All of which brings us to this final question about having enough key man (or woman) life and disability insurance: Are qualified candidates available to properly fill a late partner’s responsibilities?
If those candidates are not readily available, or if finding such a person requires more time and effort, then a business should ensure it has sufficient key person life insurance to survive.