Why Do I Need Key Person Life Insurance?
Unfortunately tragedy can strike as it did for Jeff Moses, President of Auto Custom Carpets; the small airplane he was riding in lost control and crashed, and upon impact everyone on board perished.
Jeff Moses’ death left a huge void in the company’s leadership. Moses was not only the president and co-owner of Auto Custom Carpets, but he was a charismatic sales leader whose knowledge and industry experience were integral to the company’s success. Without Moses, the company would expect an immediate drop in sales revenue.
The future of the business depended on the ability of the two remaining partners to quickly find and recruit a qualified replacement before the company’s working capital dried up.
Fortunately, the executive team had the foresight to purchase Key Person Life Insurance policy for each partner. Key Person Life Insurance is life insurance on ‘key’ employees in a business. In the event of a death of said employee(s), the business would receive a payout similar to life insurance. This money would allow the business to remain solvent during a time of flux and uncertainty. The money can be used for sales revenue, fund a buy-sell agreement or cover the cost of finding and training a replacement.
Key Person Life Insurance enabled Auto Custom Carpets to recruit an experienced sales professional away from one of their competitors, and in less than 30 days after the tragic accident, the company was back up and running at full speed.
Is your business similarly prepared to survive the loss of a key employee? Contact us at Midwest Insurance Group, (262) 646-5777 to discuss whether Key Person Life Insurance is the right fit for you.