Keyman Insurance in Frederick Maryland
Keyman insurance (also referred to as executive insurance) is a life insurance policy that provides a death benefit to the company should one of their key employees or executives die. Taking out a keyman policy on essential employees provides the assurance that the organization will continue to survive (and thrive) even after losing someone that was vital to its operation.
At Balderson Insurance, we understand the need to protect your most valuable human capital. As an independent agency, we work with several of the leading carriers in Maryland to provide the right keyman insurance policy to meet the needs of your organization. Looking for keyman insurance in Frederick Maryland? Call us today at (301) 874-0772 for additional information and a free quote.
Keyman insurance can be taken out to cover any member of an organization. Some common examples include:
- Executives of the company
- Owners, partners or shareholders of the company
- Employees with key roles in the organization
- Employees that deal directly with customers, clients or suppliers
- Any employee that would be difficult to replace
How Can the Death Benefit from a Keyman Policy be applied?
Since the organization (and not the family) is the beneficiary of the policy, they will typically apply the death benefit to help ease the transition the company must make after the key member is gone. For example, if your company has a salesperson that brings in over 50% of your annual revenue, you will need some time to train someone else to move into that role. In the meantime, your business revenue could drop significantly. Keyman insurance allows you to use the death benefits for training costs and to help compensate for lost business income.
Another scenario is the potential disruption caused by the loss of one of the owners or shareholders. Rather than allowing ownership to fall into the hands of someone who does not share the vision of the company, a keyman policy can provide the funds needed to buy back the owner’s shares from his/her heirs. In this case, the policy should be accompanied by a written buy-sell agreement between the owners.
Keyman insurance is a highly specialized life insurance product and rates can vary widely by carrier. If you are considering this type of insurance for your organization, it is important to check around with several insurers to find the best policy to fit your needs and budget. Contact Balderson Insurance today and let us do the shopping for you!