Insurance is in at least one sense about offering compensation when a future loss occurs. It is, therefore, in this regard that as a business owner you ought to consider getting a key man life insurance. When you have this policy in place your business will be protected from problems, which may occur because of the absence of key employees due to disability and death.This key man life insurance is actually protection taken for principal employee(s) of your company whose absence could affect important workflow in the organization.
Of course every staff member of your company is important, however, there are some without whose quick replacement a company's continued success may be in doubt and getting this replacement is often not a cheap exercise. And this necessitates the need for getting this insurance.
Besides death another cause of losing critical staff can be disability and this should be taken into consideration as well when taking this insurance. As statistics like one in every five individuals being disabled for a minimum of one year just before their 65th birthday should serve to motivate you.
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 item is that the policies when gotten for the vital staff belong to the corporate outfit and this only offers protection for the outfit alone.
Consequently, when the cold hands of death take this person, it is the company that gets rewarded and has the right to use the fund the way it wants to.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.
However, before you decide to create a family trust or take key man life insurance policy you must be sure you need same.
Therefore, seek professional assistance for guidance.