Company Insurance in the Case of Employee Death
There are many potential disruptions in a company that may put its very existence in doubt. Traditionally, these include fires, theft, vandalism, cyber-attacks and tornadoes or other weather events. The unexpected death of a key employee can be just as disruptive to a company’s bottom line. A key life policy can protect a company in the case of the death an irreplaceable employee.
The first step is to identify employees whose deaths would significantly affect the performance of the company. Any employee whose loss would affect the viability of the company would be a prime candidate. The next step would be to take out a company policy on this person. The amount of the policy would be determined in part by how much it would cost to recruit and hire a replacement and to pay any deferred compensation to the employees family. It could also provide funds for lost profits and affected overhead expenses.
A key life policy can be part of a company’s strategy to protect it from major disruptions in its operations. The policy would not extend beyond the period of employment for the insured person, but it would provide relief in the case of death when the employee is working for the company. It can also protect the reputation and brand of a company by providing continuity.