Retailers and wholesalers can potentially benefit from key man insurance, since often retailers and wholesalers are heavily dependent on one key person in the organization. This key person might have spent years developing business relationships that cannot be easily replaced or replicated.

Typically, life insurance is a contractual arrangement between an insurance company and you. While you pay for monthly or yearly premiums, your next of kin receives a lump sum (death benefit) in case of your death. 

The insurance cover can be either term or whole life. There are mainly three types of whole life insurance in the USA -whole traditional life, Universal Life, and Variable Universal Life. However, within these major covers, there are minor cover variations. Sometimes, whole life insurance cover is referred to as permanent life insurance.

In 2018, according to the American Council of Life Insurers, four million people enrolled for life insurance while at the same time, five million nine hundred thousand people enrolled for whole life cover in America.  

What is Term Insurance?

Term insurance is the simplest form of life insurance. It is only in case of death within the term of policy that the insurance company pays. The period of the policy ranges from one to thirty years. 

There are two basic types of term life insurance policies- decreasing term and level term. For decreasing term, the death benefit drops over the cover term. However, unlike decreasing term, the death benefit does not change for the level term during the term policy.

In traditional whole life, the premium and the death benefit are designed to stay the same throughout the policy period. Nevertheless, the cost per $1,000 of benefits increases with the increase in age. As a result, people who are advanced in age receive more benefits.

How Key Man Life Insurance Works

Who is the key person in an organization? This Key person can be the manager, the CEO, or in most cases, the founder. The organization is likely to go on its knees with the demise of the key person. To caution this scenario, the organization subscribes to Key Life insurance cover. 

The key man is covered for a certain amount determined by the premium payable by the organization. Unlike other insurance policies, the benefits of Keyman insurance in case of death of a key person covered go to the company or organization and not to an individual.

The benefits are used to stabilize the organization before another suitable person replaces the dead key man. Otherwise, the benefits are used to wind up the company.

How Can Business Obtain Key Man Life Insurance?

In every company and organization, there is a key person. It is on this premises that Keymaninsurance covers the critical person. The organization pays the rates and is the beneficiary of the cover. If for any bad luck, the critical person falls dead, the company receives the benefit insured.

 Why You Need Key Man Insurance Policy

There are many shortfalls when starting or growing a business. In the process, one of the last things most entrepreneurs think of is insurance. In small businesses, the key man doubles as the founder or owner, on infrequent occasions, an employee.

Keyman is crucial for any business and is likely to cause a business's downfall in its unexpected death. Key Man Insurance is, therefore, necessary for these people.

The primary purpose of Key ma insurance is to caution the company or business in case of the untimely death of the leading employee. Through the proceeds paid by the insuring company as benefits, the insured company can remain afloat till they find a replacement. Other options that key man insurance policy can pay to include;

• Debts

• Severance to employees before orderly closing down

• Distribute money to investors etc.

Who Are the Top Carriers?

A life insurance specialist offers keyman life insurance. Several companies in the USA provide life insurance covers. The mainstream insurance companies include;

Pacific life

The company is located in Newport Beach, CA. PL9A. The company has several affiliates, including Pacific Life & Annuity Company. Pacific Life Insurance Company is responsible for the issuance of policies.

Lincoln Financial Group

The company offers life insurance, retirement plan services, annuities, and workplace benefits. Its name was derived from President Abraham Lincoln's son, Robert Todd Lincoln.

OneAmerica

This particular company has shown fast growth in the mutual insurance holding companies in the United States. In addition, the company has smaller companies that rely on OneAmerica’s national network of financial professionals in services and products.

The company was voted the best and affirmed A+ in financial strength. Indeed it is the second-highest of the possible fifteen ratings. 

There are about three thousand one hundred employees who work under this company. In addition, the firm has many affiliate companies under its umbrella.

The total asset for the company goes beyond $74.1 billion, while its revenue is over $2.06 billion.

JohnHancock

It is one of the most spectacular companies that admit applicants with diabetic conditions. The company believes that the disease is not meant to define who you are. 

John Hancock Life Insurance Company of New York is located in the USA, Valhalla, NY 10595. John Hancock Personal Financial Services, LLC, a registered investment adviser, provides financial planning and investment advice.

Nationwide

The company has offered insurance services for over ninety years. The company started as motor insurance that later grew to become a renowned insurance company in the world.

This particular company has a fine touch with business protection. The company takes pride in a Nationwide mobile app that enables subscribers to pay for many utilities. Some of the items you can sort with this app includes;

• Payment of bills

• Viewing of your policies

• Starting an online motor claim

• Viewing of insurance cards without logging in

The company is based in the USA, California, with several agents in almost all the state. First, however, you need to identify the agent with the type of policy you hold- auto, business, life, home, among others.

Minnesota Life

This insurance company is an affiliate of Securian Financial, one of the prominent insurance companies in the United States. Most agencies that perform rating of insurance firms rate this insurance firm highly. Minnesota Life Insurance Company has over 140 years in the service.

The company offers more than life insurance. As the eighth largest insurance company in the United States, it provides retirement packages, group insurance, financial consultations, among others.

There is a big difference between a key man insurance policy and a personal insurance policy. If you solely own a business, an essential insurance policy would be unnecessary. 

How to Determine the Business Need for Key Man Insurance

The first thing is to identify a crucial employee in the company who is not quickly replaceable. Then, always ensure you get as much benefit as possible to pay for their premium.  

There is a need to always shop around for reasonable rates and compare their quotes. Most importantly, ask for term insurance over whole or variable life.

Although the critical man insurance does not bring back to life the critical person, it takes away unnecessary worries from both the families of the deceased and the company employees.