Effective October 1, 2023, Rooney Insurance will be located at 5100 E Skelly Dr, Suite 1010 in Tulsa, Oklahoma
Effective October 1, 2023, Rooney Insurance will be located at 5100 E Skelly Dr, Suite 1010 in Tulsa, Oklahoma
Key Man life insurance can help protect businesses when an essential individual in the company’s operation passes away or cannot work. It is not a topic people like to discuss. However, it is a necessary protection for some businesses. Many small businesses rely only on a single individual for daily functions.
Key Man Insurance is also commonly required with a purchase agreement to transfer business ownership if one partner dies. Are you prepared in the event of these types of circumstances?
Key Man insurance is a specific policy primarily for small to medium businesses. It helps protect the business if a person(s) vital to the company dies or becomes disabled and unable to keep up with their role. These individuals typically possess skills and knowledge that contribute significantly to the business’s revenues and profitability. These individuals are usually business owners or partners, executive leaders, or top salespeople. This coverage is an important risk management tool that can provide the funds needed to continue day-to-day operations, handle debts, or bring on a suitable replacement if the unforeseen were to occur. In such an unfortunate circumstance, a key man insurance policy can indeed be what saves the business. Therefore, it helps protects the financial well-being of all those involved and connected to the business’s success.
There is no exact one-size-fits-all method for determining the amount of key man insurance necessary to have. There is a variety of factors you, your legal counsel/accountant and your insurer should discuss to help you determine what best suits your business, including:
Running a family business, especially one with employees that are dependent on a key individual(s) may require the purchase of 2 key man policies – life insurance with critical illness benefits, and a separate disability insurance policy in the event of a career ending injury or illness. In contrast, a sole proprietorship without employees will likely only need enough coverage to pay off the company’s remaining debts. It is essential to consider if you want protection for death, disability, or both and how much is necessary and appropriate in your situation. Be very specific with your insurer and attorney about how you plan to use this coverage if various scenarios should occur so that all the proper documentation can be set up properly from the beginning. Additionally, note that when purchasing a key man insurance coverage for an employee, that employee must give their consent in writing.
Rooney Insurance Agency, Inc., headquartered in Tulsa, OK, has provided insurance solutions to businesses both locally and in several states across the USA since 1960. For more information about the firm and its capabilities, please visit www.rooneyinsurance.com .
