As a brewery owner, can you imagine what would happen if a key person in your company were to pass away unexpectedly? How would this impact your business, your employees, your family, etc? This is where Key Person Life Insurance comes into play.
What is key person life insurance?
Key Person Life Insurance is a life insurance policy purchased by a company on the life of the business owner, top executive, partner, or any one else who is critical to the success of the business.
How does Key Person Life Insurance Work?
The company (not an individual), purchases this policy on a specific employee. The company pays the premiums and is both owner and beneficiary on the policy. If that key person were to die, the company would receive the proceeds from the policy.
What can the death benefit pay for?
The money can be used for a wide-range of things, including:
- Recruiting, hiring and/or training of a replacement employee
- Pay off business debts
- Pay investors
- Buyout the surviving family member’s ownership (as part of a buy-sell agreement)
- Off-setting day to day operations
- Supplementing lost revenue
- Costs associated with closing the business
How much does Key Person Life Insurance cost?
The amount of coverage you need depends on the size of your brewery and the key person’s role in the business. And – just like regular life insurance, the cost of coverage varies on the age and health of the person the policy is being taken out on.
If there is a situation in which the absence of a person in your brewery would cause major financial harm to the company, Key Person Life Insurance should be purchased.
If you’re interested in getting a proposal on Key Person Life Insurance, email Mike at Mike@BrewerInsured.com for more information!