The Role of Key Employees

Key employees are vital to the success of ownership transition, as they provide continuity in the day-to-day operations of the business. They can also offer real help in the planning process and involving them will help prevent the rumours and innuendo that might otherwise arise on the employee 'grapevine' in the absence of official information.

You can protect your business against the risk of these employees suffering from premature death, by insuring them with key person insurance. Your business would purchase life insurance on the employee, pay the premiums and become the beneficiary of the policy. In the event of that key person's death, the business would receive the insurance proceeds.