Minimize Risk with Key Person Disability
Let me pose a simple question. What would happen to your company if you became disabled and were unable to work for a period of time?
If you are an independent agent or an agency owner, the probable answer is that you would have to attempt to sell your book of business quickly or let your staff go and close-up shop. What happens when a key person to a business becomes disabled? The simple answer is that the business suffers.
The physical loss of a key employee or employer eventually leads to the loss of present and future business accounts, the loss of relationships with important contacts, not to mention the office workflow issues that would inevitably arise. Additionally, corporate capital would be allocated to finding a replacement employee who would then need to be trained and paid an appropriate salary. The costs of the loss of a key person due to disability can easily put a company into absolute chaos, both operationally and financially.
Businesses need short-term insurance solutions to minimize corporate risk against the disablement of an owner or key employee. Key person DI is the answer.
The insurance proceeds can be used however the powers that be see fit, and although the premium payments aren’t tax-deductible, the benefits are paid tax-free. The monthly benefits are meant to force a temporary corporate renaissance to hire/train a replacement employee for the progression of the firm or to economically steady the company for an eventual buy-out.
Key person disability insurance is an integral part of corporate succession planning and should be every bit as important to your clientele as life insurance in minimizing business risk.