Using life insurance to protect your key employees

Most companies rely on work experience, and expertise of some very valuable employees, which are essential for efficient operation and profitability of the company. If a chairman, director or technical talent, the loss of a staff member of this crucial and often do so could result in loss of income and even closure.

Many employers spend time and money to protect the tangible business assets such as buildings and machinery with the traditional policies of insurance business, but are often unaware of the risks much higher due to the dependence on certain key employees.

Take a moment to think of the staff members that the operation is based on everyday. Do you have a sales manager or salesman who is responsible for generating most of your orders? Do you have any plans for ensuring the normal working practices must continue COO or president die or be unable to work due to illness or injury? The reality is that many companies are so busy working in the field to take a step back and consider the threats to its continuation and profitability.

Another question is how easy it would find a replacement for a key employee and what would be the cost of hiring and training will be? Your company is planning for this eventuality and where would the money to finance such an operation is? You must also take into account any potential loss of revenue for the temporary or permanent loss of a key member of staff.

Fortunately, part of the solution can be provided by a simple policy of life insurance owned by the company ensure that it is the life of the employee. If the employee dies during the plan period, the company would receive a lump sum of cash to finance the costs of finding a substitute and any loss of revenue. Many key man policies have a period corresponding to the employees expected to retire. Another risk to consider is the potential disease critic of a key employee that causes prolonged absence or permanent loss. Statistics show that the odds of being diagnosed with a critical illness are higher of dying before age 65 so that the risk to the company may even be greater. Adding critical illness insurance policy to a key man in a position to ensure this risk is covered and the lump sum cash payment even if the worker is diagnosed with an illness covered by the policy.

Whichever type of coverage you choose, it is important to shop around and compare the features of policies and premiums from as many insurers as possible. If you are in doubt about life insurance for a key employee, it is important to take professional advice of an independent financial adviser. However, if you know what cover you need, go online and use a quote comparison website and watch out for brokers life insurance discount that could save up to 40%, sacrificing some or all of their earnings to reduce premiums to be paid ....