
Every business has at least one key individual whose death or disability could significantly disrupt operations, and key person insurance provides companies with a lump sum payout in case any essential employee dies or is disabled.
Consider key personnel who make significant contributions to your business’s profit and earnings, such as an experienced salesperson or product designer.
Critical Illness Rider
Critical Illness Riders, or CIs, are add-on benefits of life insurance plans which provide lump sum payouts if diagnosed with severe illnesses. This helps protect savings, investments and assets against being depleted quickly due to unexpected illness and provides financial protection for both you and your loved ones.
Tax-free payouts from critical illness insurance riders (CI) may be attached to term life or endowment policies for greater flexibility in how the funds may be utilized compared with traditional health plans that only cover hospitalization expenses.
Note: A critical illness (CI) policy differs significantly from comprehensive medical or long-term disability coverage, which you can obtain via individual or group insurance policies offered by large employers. Furthermore, these CI policies often come with waiting periods and exclusions; it would be wise to consult an independent insurance broker or financial advisor when making this decision.
Accidental Death & Dismemberment Rider
Accidental Death and Dismemberment (AD&D) riders provide additional protection in case of accidental limb, eyesight or speech loss due to accidents. These policies typically end at age 70 and tend to be cheaper than standard life policies.
AD&D riders can be purchased separately or as add-ons to a life insurance plan, though in either instance you will likely be required to go through an application process that identifies potential health and lifestyle risks that need to be assessed prior to approval.
A rider like this one may be particularly beneficial to individuals working in high-risk professions such as firefighters and police officers, or traveling frequently. Additionally, this rider provides extra security for sports players and those involved with other high-risk activities such as diving. Costs will depend upon which company provides it but typically come out much lower than comparable term life policies with similar coverage.
Business Income Rider
Losing a key team member can have devastating repercussions for any business, be it an essential salesperson who drives substantial revenue for your organization or an employee with niche skills who is difficult and costly to replace.
Key person life insurance policies offer businesses a death benefit that they can use for several purposes, such as offsetting profit losses, covering recruitment expenses or fulfilling any debts or financial obligations that would arise as a result of losing key people.
Western & Southern’s financial professionals provide expertise, tools and insight that can assist your company in finding the appropriate coverage solutions. With decades of financial stability and years of experience partnering with businesses like yours, Western & Southern can serve as a trusted partner. Get in touch today for more information about key person protection solutions from us.
Long-Term Disability Rider
Losing key staff due to disability rather than death can be devastating to any business, yet long-term disability riders provide some protection against lost contributions by giving companies time and financial cushion to find replacements, as well as cover some associated with training new staff members.
Policy holders can add a cost-of-living adjustment (COLA) provision that automatically increases base benefits each year to keep up with inflation, providing financial security to key employees as well as showing that your company is prepared.
Key person insurance policies don’t fit all, with costs varying greatly between policies. By choosing riders tailored specifically to your risk exposure and strategic goals, it can provide an essential safety net. By showing foresight and responsibility through this form of policy coverage, it can also help build trust between key stakeholders and investors.