The Key Man Life Insurance Policy
The Key Man Life Insurance Policy
Insurance is all about giving protection against or offering compensation for future loss.
It is with respect to this that as someone who owns a business you need to consider having a key man life insurance.
Getting this insurance will protect your business from experiencing any sort of problem due to the absence of a principal employee usually as a result of death or even disability.
The key man life insurance has to with the protection taken for your essential personnel whose absence may affect your business outfit's output or influence in the business environment.
All your staff members are of course important, but there are those whose absence can cause major problems in your corporate outfit and to replace them when they are not around can be quite expensive.This is why taking this type of insurance should be considered and taken seriously.
Apart from death, disability is another reason why a key staff may not be able to function in his/her duty.
So when considering this insurance you should put this into cognizance. As statistics such as one in every five people will be disabled for at least one year before 65 years of age is not exactly cheering news. Okay how to understand its workings? First it is important that I say here that this insurance, which is taken for personnel, is going to be owned by the business outfit and will consequently be its beneficiary. Now a business outfit may decide to buy key man life insurance policies for its vital staff to cover money, which will be spent to replace them due to disability or death.An important thing to note is that this insurance policy is designed in order to protect businesses and not key employee.
If an employee under this policy is disabled or dies, the proceeds of the policy goes to company, which is used as the company deems fit.
It is good if you; a business owner has been covered by this insurance because this will ensure your business outfit continues with little or no hiccups. Nevertheless, what about passing on your private estate to your beneficiaries; what you are going to leave behind, without them experiencing probate proceedings.
One way this can be done is by creating family trust.
A family trust if you must know is also known as a revocable living trust and is set up when one is still living and subject to the terms being changed.
The way this is normally done is this: ownership of part or all of your property is transferred to a trust created by you. This trust is eventually held and managed by a third party given such responsibility by you.
Notwithstanding, before you settle for family trust or a key man life insurance policy you need to confirm that you need this.
Seek clarification from professionals before making your decision.
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