Key Man Insurance is a life preserver for your business.  It can prevent the devastating impact of losing a key person in your business, your revenue, and you personally.

https://www.youtube.com/watch?v=cBEB56hfKEM

It can mean the difference between your small business collapsing or rising like a phoenix from the ashes. At one of your most vulnerable moments, key person insurance can be the infusion of capital needed to protect your business.

But as you’re busy in the day-to-day of your business, this element of business continuity planning often gets forgotten.  It often gets stuck in the mental file of nice to have, but I’ll get to it later.  And that can be a fatal mistake.

Instead, we’ll have a conversation about how to make sure small businesses can keep moving forward, no matter what happens.  And we'll help you prevent the loss of a key person from threatening one of your companies, your profits, and your livelihood. 

Table of contentsWhere Key Man Insurance Fits into the Cash Flow SystemYour Key Employees Are Your Most Valuable Company AssetsWhat Makes a Key Person, in Fact, “Key?”Impact of Losing a Key PersonMeasuring the Value of a Key PersonOptions to Transfer the Risk of Losing a Key PersonWhy Key Man Insurance Is the Best Option to Cover the Cost of Losing Critical EmployeesHow Key Man Life Insurance Policies WorkHow a Key Man Insurance Policy Is TaxedTypes of Key Man InsuranceExtras to Supercharge Your Key Man InsuranceYour Next Step to Key Man Insurance

Where Key Man Insurance Fits into the Cash Flow System

Protecting your small business from financial threats is just one part of a bigger journey to building time and money freedom. 

That’s why we have created the 3-step Business Owner’s Cash Flow System. This is your roadmap to take you from just surviving, to a life of significance, purpose and financial freedom.

The first step is keeping more of the money you make by fixing money leaks.  Then, you’ll protect your money with insurance, legal protection, and Privatized Banking.  Finally, you’ll put your money to work, increasing your income with cash-flowing assets.

Key Man Insurance is part of Stage 2.  It helps you protect the wealth you’ve created so that no event has the power to sweep it away.  It’s part of your livelihood safeguard, ensuring that your company continues producing your income. 

Your Key Employees Are Your Most Valuable Company Assets

Where does the value of your company come from?  If you started naming your company assets off the top of your head, you’d probably list your real estate first. Then, perhaps your cash, inventory, equipment, accounts receivable, clients, goodwill, and your reputation.

But topping that list is your people.  People make all the things happen.  And you know that great people are worth their weight in gold.  Your business would be nothing without the people who add their knowledge, skill, and expertise to create what everyone knows as your company.

What Makes a Key Person, in Fact, “Key?”

For one POS company that provided machines and merchant services, one salesperson brought in 75% of the business’s revenue.  The salesperson is the ultimate example of a key person – someone you would rather not have to imagine your business without. 

Losing that person would mean lost sales, a floundering business, and significantly less personal income to you.  It might cause you to struggle to pay your overhead and other employee’s salaries. And because of their unique abilities and talents, the cost of replacing them would be tremendously high.

Perhaps they have the Midas touch in sales or marketing, bringing in the majority of your new accounts. It could be the VP of operations or key decision-makers who are largely responsible for the efficiency and processes your company is known for.  Or maybe it’s your #1 technician, with the wealth of knowledge, skill sets, and expertise that has built your company’s reputa...