A Key Man’s Life Insurance – Important Facts

The terms key man life and key man’s life are often used interchangeably. But, they do not refer to the same kind of coverage. Key man life covers a specific amount of life for an individual, while a key man’s policy covers the company that underwrites the insurance.

Key man life insurance provides protection to the beneficiary of the insured person, if he dies during the term of the policy. Rather than an individual paying the premiums, the insurance company purchases the coverage and pays out the benefit if the insured person dies during the term. The key man is the name of the company that underwrites the insurance and is the only person who can legally sell or transfer a key man policy.

Life insurance is very important to protect a business entity from the loss of income caused by the death of one of its employees. Most companies have separate plans for their workers and employees of their customers. Employees usually purchase a separate life insurance policy from their employer. However, in some cases, the employer may also be able to provide a key-man policy that would cover the employee’s dependents.

When a key man’s policy is purchased, the cash value of the plan is transferred to the insurance company. The cash value does not have a maturity date because the policyholder (the individual or business entity that buys the coverage) typically has no time to pay the premiums because of the death of the insured person.

Many key man’s life insurance policies also include an investment component. As the beneficiary of the life policy, the insurance company typically invests the cash value in an insurance certificate. These certificates earn interest and are held as collateral on the life insurance company’s policyholder loan. If the value of the life policy drops below the insurance company’s interest rate or if there is a failure by the insured to make regular premium payments, then the cash value is used to pay off the loaned principal, plus interest.

Some key man’s life insurance policies are set up to pay benefits if an insured is unable to work for a certain period of time after he or she becomes a policyholder. The benefits are paid to a named beneficiary (or the name of the insured). If the insured is deceased, the insurance company usually sells the policy to a beneficiary designated by the insurance company. to recover the cost of the policy.

The key man’s life policy was first offered in the mid-nineteenth century by an insurance brokerage firm called the Wacker Company. Today, a key man’s life policy is available from most major insurers. While the premiums may be higher than ordinary individual or family policies, most people consider it a worthwhile investment because they can receive substantial benefits when the insured person dies. The premiums can be deducted from the person’s annual income tax return.

Key men’s life insurance may also be referred to as life policy, key man’s insurance or key man’s contract. It can also be referred to as general term life, investment policy, investment contract, or life contract.

Key man’s life insurance is usually less expensive than an individual policy, since the insured person is likely to be an unmarried younger adult. The life coverage amount is based on a number of factors, including the age of the policyholder, the insured’s health, and the amount of cash value a person has invested in the policy.

One of the greatest advantages of key man’s life insurance is the ability to use the policy for any purpose, without restriction. You can use the policy for any eventuality, and for any reason. There is no age limit, no health limitation, and no income limitation on key man’s life insurance, except that the insured must be a citizen of the United States and at least 18 years of age or older to purchase it.

There are different kinds of key man life insurance policies: A key man’s life insurance provides coverage for both term and whole life. In term life, the insured is generally covered for a predetermined amount of time (usually from one year to ten years), usually with no renewal clause or premium payments.

Whole life provides coverage for the insured’s entire lifetime, although you can get an increased term and premium payment on the policy if you choose. Whole life policies are generally most useful for individuals who wish to invest in a longer-term investment, like bonds or mutual funds.