Key person life insurance and the entrepreneur

Key person life insurance is the key to the entrepreneurs long-term success, as it insures that you will get paid if there is a serious problem, like your partner (key person) death, if he gets disabled, or have a heart attack etc.

The problem with all new businesses and so for entrepreneurs is that you do a lot of work first, for which you will get paid later when the business is successful - this is where the risk lies! This is why you need to get key person life insurance to cover you in this dreadful situation, in a lot of the cases this will make the difference between your businesses survival or its demise.

The first step in being able to attain key person life insurance is a good business plan, yes the same one you the entrepreneur will need for the bank for financing etc. As this will determine the potential value of the key man, and the business.

One of the foundations to be able to get key person life insurance is that you must be able to prove a loss on your side if your key man should fall away or die.

Situations where key person life insurance should be considered is:

• Business Partnerships
• New companies
• Employees that is unique and which can not be replaced
• Partners that is unique and which can not be replaced
• Creditors - people that owe you a lot of money (do you want to claim it from their estate?)
• Shareholders - do you want to negotiate with their spouse, or have the spouse as a partner? 

Then ideally you want a lawyer, insurance agent combination to help you put all of the above in place, as in a lot of cases their are contracts that must be put in place and most of the time it is not all so obvious what to do. One contract forgotten can have a devastating effect later!

So as you can see key person life insurance is an essential part in managing your businesses risks, and sometimes your own risks in the proses, if you have any questions don't hesitate to call, or follow this link to my website: http://sandtonkeymaninsurance.webs.com/contact-us