What Is Key Person Insurance?

What Is Key Person Insurance? 

Key person insurance is a life insurance policy that a company purchases on the life of an owner, a top executive, or another individual considered critical to the business. The company is the beneficiary of the policy and pays the premiums. This type of life insurance is also known as "key man (or "keyman") insurance," "key woman insurance," and "business life insurance."who don't have a plan.

• Key person insurance is a life insurance policy a company buys on the life of a top executive or other critical individual. 
• Such insurance is needed if that person's death would be devastating to the future of the company.
• For small businesses, the key person might be the owner or founder.
• The company pays the insurance premiums and is the policy's beneficiary, should the person die.