Key Person Insurance

A life insurance policy that a company purchases on a key executive's life. The company is the beneficiary of the plan and pays the insurance policy premiums.

Also known as "key man insurance", "key woman insurance" or "business life insurance".

Key person insurance is needed if the sudden loss of a key executive would have a large negative effect on the company's operations. The payout provided from the death of the executive essentially buys the company time to find a new person or to implement other strategies to save the business.


Investment dictionary. . 2012.

Look at other dictionaries:

  • key person insurance — UK US noun [U] ► INSURANCE BUSINESS LIFE AND HEALTH INSURANCE(Cf. ↑business life and health insurance): »Key person insurance is designed to protect a company from the loss of a person who makes a significant contribution to the financial success …   Financial and business terms

  • key person insurance — See keyman life assurance/keyman insurance Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010 …   Law dictionary

  • key-person insurance — UK US noun [uncountable] business an insurance policy intended to pay for replacing a worker who is very important to an organization Thesaurus: insuring and insurancehyponym types of tax and taxationhyponym …   Useful english dictionary

  • key-person insurance — Gen Mgt an insurance policy taken out to cover the costs of replacing a key employee. Key person insurance comes into play in the case of an employee’s mediumto long term sickness or death. Also known as key man insurance …   The ultimate business dictionary

  • key-person insurance — UK / US noun [uncountable] business an insurance policy intended to pay for replacing a worker who is very important to an organization …   English dictionary

  • key-person insurance — / ki: pɜ:s(ə)n ɪnˌʃυərəns/ noun an insurance policy taken out to cover the costs of replacing an employee who is particularly important to an organisation if he or she dies or is ill for a long time …   Dictionary of banking and finance

  • key-man insurance — Gen Mgt see key person insurance …   The ultimate business dictionary

  • insurance — in·sur·ance /in shu̇r əns, in ˌshu̇r / n 1: the action, process, or means of insuring or the state of being insured usu. against loss or damage by a contingent event (as death, fire, accident, or sickness) 2 a: the business of insuring persons or …   Law dictionary

  • insurance — A contract whereby, for a stipulated consideration, one party undertakes to compensate the other for loss on a specified subject by specified perils. The party agreeing to make the compensation is usually called the insurer or underwriter; the… …   Black's law dictionary

  • insurance — A contract whereby, for a stipulated consideration, one party undertakes to compensate the other for loss on a specified subject by specified perils. The party agreeing to make the compensation is usually called the insurer or underwriter; the… …   Black's law dictionary

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