Key Person Disability Insurance
Key person disability insurance addresses the financial disruption a business faces when an essential contributor experiences a covered disability, providing funds to manage the transition and keep the business operating.
When Losing One Person Disrupts the Whole Business
Some businesses depend heavily on one or two people whose skills, relationships, or knowledge are difficult to replace. If such a person becomes disabled, the business may face lost revenue, the cost of finding and training a replacement, and the strain of operating short handed during a recovery period.
Key person disability insurance is designed to provide funds to the business to manage that disruption, distinct from life coverage which responds to a death.
How Benefits Work
The business typically owns the policy and pays the premium. If the key person experiences a covered disability, the policy pays benefits according to its terms, which may be a lump sum or monthly payments over a defined period.
Benefits, eligible expenses, ownership, and payment structures depend on the policy. These details should be reviewed carefully so the coverage behaves as intended when needed.
Who Counts as a Key Person
A key person might be an owner, a senior executive, a top producing salesperson, a specialist whose expertise drives revenue, or anyone whose absence would create significant financial strain. Identifying who qualifies is the first step in structuring the coverage.
Pairing With Key Person Life Insurance
Disability and death are different events with different financial consequences. Key person disability insurance addresses the costs of a living absence, while key person life insurance addresses the costs of a death. A complete continuity plan often includes both, so the business is protected either way.
Our Approach
We help you identify which people the business genuinely depends on, estimate the financial impact of losing them temporarily, and structure coverage that reflects that exposure. Where ownership or buy sell arrangements are involved, we coordinate with your attorney to keep the structures aligned.