You may or may not have seen the ABC Television program “What would you do?” hosted by John Quinones where ordinary people are observed by hidden camera to show how they behave given a specific dilemma that requires them to act or walk away. In business, we can find ourselves in many “What would you do?” moments that require our attention now or do nothing and pay the consequences later. One of those situations can pertain to the loss of a key person within your company.

What would you do if your business lost a key person or persons? Key people are those within your organization that have the knowledge, the skillset and make contributions that are critical to the company’s success. If you do not plan and act now, it is possible that the loss of such talent could disrupt the operations of your business temporarily or in the worst case, permanently causing an unplanned business liquidation or closure.

Protection against such an unplanned situation can be put in place by leveraging key person insurance. Key person insurance can help protect your company against the sudden loss of such people by maintaining continuity and covering any losses while you identify and train a successor.

Key person insurance is life insurance – term or permanent – that pays upon the death of specified people within the company to help your business survive financially if one or more of these people die.

The business is the owner and beneficiary of the life insurance policy that is taken out on the key person, both paying the premium and receiving the death benefit. The proceeds from the insurance can be used to keep the business running by covering expenses associated with finding a replacement or help by paying any outstanding bills during a business interruption.

Do not find yourself in a “What would you do?” situation without a plan to act. Nobody wants to plan for the untimely loss of key people within your organization, but if you did, what would you do? If you have more questions about key person insurance, how it works and applies to your business, please contact a member of the Saling Wealth Advisors team!

This material is not financial advice or an offer to sell any product and is not a recommendation to buy or sell any particular security. The opinions expressed are those of the Saling Wealth Advisors’ Management Investment Team and are subject to change without notice.

Saling Wealth Advisors (“SWA”) is an independent SEC registered investment advisor. Registration does not imply a certain level of skill or training. This material is provided for informational and educational purposes only. More information about SWA including our advisory services, fees, and objectives can be found in our Form ADV Part 2A, which is available upon request.