Key Man Insurance Policy Definition
Key man insurance is an important form of business insurance.
Key man insurance policy definition. Key person insurance is a life insurance policy taken out by an organization or business on the life of a key executive employee partner or proprietor to protect against the loss of value revenues or profits of the business. The company is the beneficiary of the plan and pays the insurance policy premiums. Keyman insurance defined keyman insurance can be defined as an insurance policy where the proposer as well as the premium payer is the employer the life to be insured is that of the same employer s key employee keyman and the benefit in case of a claim goes to the employer. Though the policy cannot replace the loss of skill it can provide the business with the funds to deal with the loss and replace the employee with another.
The business is the beneficiary under the policy. A keyman insurance policy protects the financial interests of the business if its key employee dies prematurely. In general key man insurance can be described as an insurance policy taken by a business to compensate that business for financial losses arise from the death or. A key man can be anyone directly associated with the business whose loss can cause financial strain to the business.
Key person insurance also called keyman insurance is an important form of business insurance there is no legal definition of key person insurance. In general it can be described as an insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of an important member of the business. Life insurance on a key employee partner or proprietor on whom the continued successful operation of a business depends. The beneficiary is the employer.
A key man policy can also be used as an employee benefit since the life insurance policy can be transferred to the executive or insured employee by the company. Key man insurance is an insurance policy taken out by a small company on the life of a. It is also referred to as the key man insurance or key employee. A life insurance policy that a company purchases on a key executive s life.
In the case of a life insurance policy it is a term insurance covering the life of the employee. There is no legal definition. Meaning pronunciation translations and examples. In general it has the following features.
The former is also the beneficiary of the policy.
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