What
consequence can your business face from the loss of a key employee?
As
a business owner you try to protect your business against lost of physical
assets, but what about lost of a key employee? Studies show the probability of
losing a key employee is more likely than a loss due to fire or most other
perils. It increases to 17 times at age 50, and to 23 times at age 55.
Furthermore, about one out of three individuals dies during work life with
consequential loss to his/her business.
In
addition most other loss due to perils are temporary; locations can be rebuilt
and office supplies can be repurchased. In contrast a new hire may need several
months or sometimes years to be as productive as his/her predecessor. The
deceased employee may also be impossible to replace.
How
to determine a Key Employee?
Every
corporation has at least one key executive or an employee who makes a
substantial contribution to the operation, profitability and success of the business.
Any individual that has critical intellectual information, sales relationships,
bank relationships, product knowledge, and/or industry contacts that may
adversely affect profits in the event of their absence, may be considered key.
Insuring a Key Employee
Although
life insurance cannot ever fully replace the value of a key employee, it can
indemnify the business for the financial setbacks that can occur. Life
insurance can provide the business with needed funds to keep the business
running, to assure creditors that their loans will be repaid, to assure
customers that business will continue operations, to cover the special expenses
of finding, hiring, and training a replacement.
Visit http://www.vintageinsservices.com/Loss_of_Key_Employee.html
for more information on how Key Person Insurance
may work for your company.
