Investor Glossary-key person insuranceInvestor Glossary-key person insuranceInvestor Glossary-key person insuranceInvestor Glossary-key person insuranceInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Key Person Insurance

The HTML to link to this page
 

Key person insurance, also known as key man life insurance, key woman life insurance, and business life insurance, is a life insurance policy purchased by a company on the life on an employee. A company usually buys key person insurance on those employees whose death could have significant adverse effects on company business. The concept behind key person insurance is that certain employees are a valuable asset to a company. A company might use the proceeds from key person insurance to hire a replacement or to train someone to fill that vacancy. Another purpose for the funds generated by the benefit of key person insurance might be to help replace profits that the key person might have generated in the future. Key person insurance is usually paid for by the company with the company as the beneficiary of the policy. Premiums for the key person insurance are usually not tax-deductible but the death benefits are usually received tax-free. A self-owned sole proprietorship may also benefit from key person insurance. The proceeds from the key person insurance on the owner might help fund any after death buy/sell agreement. Key person insurance is also benefit to the company in the event that the employee is disabled. Key person insurance is often purchased a part of a total business insurance package.



Rate this key person insurance definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: ex-dividend, deferred revenue, limit order, FTSE, stock split, APR, 401a, 144a, phantom income, debt service coverage, liquidity ratio, current ratio, diluted share, LIBOR, margin rate, minority interest, ex-dividend date, reverse mortgage, dividends payable, Zero Cost Collar, covered put, balance sheet, 1035 exchange, deferred tax, per diem, VIX, class C shares, wholly-owned subsidiary, required rate of return, EBITDA, real GDP, 1031 exchange, stock market close, in escrow, risk management, inflation, quality assurance, command economy, option premium, average price per share, Key Rate Duration, irrevocable trust, annual return, open position, cancelled check, retained earnings, FICO score, labor relations, implied volatility


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use