If you have a family, you understand the importance of life insurance when it comes to protecting your loved ones. Businesses need similar protection, especially when they rely on one or two significant employees for their special skills or ability to generate income. These are most likely individuals who are crucial to the ongoing success of the business. If one of them passes away or is disabled, the business may not survive.
Consider this example: Sam and Jack are key employees at a successful software company. While Sam is the programmer who developed much of the custom software, Jack is skilled at selling the product. Both of them play a critical role in the business, and it’s questionable whether the business would survive if something happened to either one of them. Key person insurance can help protect the company from a potential loss.