Key Person Insurance – Protect Your Business’s Key People

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Key Person Insurance – Protect Your Business’s Key People

Key person insurance (sometimes called key man insurance) is a life—and optionally disability—policy the business owns on an essential individual. The company pays premiums and is the beneficiary. If that person dies or is incapacitated, the benefit injects cash into the business to stabilize operations, reassure lenders, and retain clients. Realegacy Partners structures coverage with expertise, excellence, transparency, and trust.

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Liquidity Buys Time—And Options

Losing a rainmaker, founder, or lead engineer can stall projects and spook creditors. A key person payout can fund a recruiter, bridge lost revenue, pay down lines of credit, or launch a client-retention campaign—so operations continue while you rebuild. Some lenders even require this coverage before extending credit.

Who Moves the Needle?

If an individual critical to the success of the business left or is unable to work, would revenue or operations materially drop? That could be a founder, a top producer serving accounts across the nation, or a technical expert holding proprietary know-how. We help quantify impact and prioritize who to insure first.

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Company-Owned, Benefit to the Business

The business owns and is beneficiary of the policy; the insured consents and completes underwriting. Benefit amounts may reflect revenue contribution, replacement costs, or debt exposure. Term life can provide economical coverage during growth; permanent life may fit long-horizon owner roles or future repurposing.

Protect Against Long Absences, Not Just Loss of Life

Key person disability policies pay the company if your MVP can’t work for an extended period. Benefits can cover salary for interim leaders, contractor costs, and cash flow gaps while you recruit.

FAQs About Key Person Insurance

Answers for Owners and CFOs

  • Is this the same as personal life insurance?

    No—this protects the company; the individual still needs personal coverage for family.

  • How much coverage is right?

    We model revenue at risk, replacement costs, and lender expectations.

  • What if the key person leaves?

    You can cancel, transfer, or repurpose certain policies depending on design.

  • Are premiums deductible?

    Generally no; benefits are typically received income-tax free—confirm with your CPA.

Fortify the Business You’ve Built

Realegacy Partners helps businesses weather the unexpected with well-designed key person coverage.