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KEY PERSON LIFE INSURANCE
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What it is:
- An employer owned life policy providing tax
free cash in the event of the death of a
key employee
- Provides indemnity for:
- Losses in sales, momentum
and credit
- Project interruptions
- Costs to hire and train a
replacement
How it works:
Advantages:
- Helps assure customers and creditors of continuity
- Provides an addition to surplus to help replace
profits with little or no tax cost
- May fund a stock redemption agreement or
deferred compensation plan
- Provides funds to recruit, hire and train
a replacement employee
- Provides for many employer purposes at a
cost of pennies for each dollar of death
benefit
CONCEPTS INDEX
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