The clear answer
Key-person life insurance is intended to help a business absorb the financial impact of losing an important individual. The amount may reflect transition costs, lost revenue, debt or recruitment needs. It is distinct from a policy meant to support that person’s family.
What to understand first
Use the questions below to compare the policy details with the need you want to address.
The trade-offs deserve a closer look
The business typically owns and benefits from the policy, with appropriate consent. Work with counsel and a tax professional on the arrangement before an application.
Bring these questions to your conversation
Use these questions to compare options on the same terms. Ask where each answer appears in the official policy or plan materials.
- What financial disruption would the absence create?
- How long might a transition take?
- Are lender requirements involved?
- Who will review coverage as the company grows?
Start a conversation with Mave
Tell us your location, broad coverage goal and preferred contact method. Mave and its affiliated network help connect inquiries with an appropriately licensed agent or agency. The agent or agency helping you will explain product availability, eligibility, costs and any compensation before an application. No medical records, government ID numbers or payment details belong in this introductory form.
Key-person insurance: common questions
What is key-person life insurance?
It is typically business-owned life insurance on a person whose death could create a material business loss. The business generally receives the benefit and can use it for needs such as hiring, debt or operating continuity.
Who should be insured under a key-person policy?
Consider people whose skills, relationships or responsibilities would be difficult and costly to replace. The proposed amount should connect to an identifiable business exposure rather than a person’s title alone.
Does key-person life insurance replace disability coverage?
No. A life policy responds to covered death. Disability-related business needs require separate analysis and, where appropriate, separate coverage. Some riders have limited benefits and should not be assumed to replace disability insurance.
What consent and tax questions matter for business-owned life insurance?
Insurable interest, insured-person consent and employer-owned life insurance notice, consent and reporting rules can be relevant. Obtain legal and tax advice before issuance; do not assume proceeds have favorable tax treatment in every arrangement.
Make this about your life.
Tell us your priorities and how to reach you. A dedicated agent can explain the available options, service scope and compensation that apply to your situation.
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