Most businesses are dependent on key people in order to keep operations running. These are the key men or women that run day-to-day operations of the company and may include owners or high ranking executives. Without these people the business would no longer able to function and would fold. Keyman insurance helps cover the costs that would be incurred in the event of a key man or woman passing. Essentially, this is a life insurance policy for the company. In the event of a death, the company receives a payout. This is not life insurance in that no one person, no spouse or child receives this payout. This money is intended to keep the business running until a new person can step in. The money can be allotted to pay off debt or to shut down operations if it doesn’t make sense for a replacement to step in or if a replacement can’t be found. Investors can be paid with this money, as can employees who might need to be let go.
Take a moment to consider your business and where it would be if you or a key employee passed. Could the business continue to run without you? Are there outstanding debts that need to be paid off? Who would be responsible for the company after you go and would that impact them financially?
At Richard Turner San Diego Insurance Agency, we can set you up with a keyman insurance policy. We focus on small to mid-sized businesses and we understand how critical locally owned businesses are to our local economy and to the vibrancy of San Diego.