    

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