This coverage is designed to protect your business upon the loss of a key employee. The tax-free proceeds from this policy can be used to find, hire and train a replacement, compensate for lost business during the transition, or finance any number of timely business transactions.

Human resources are a company’s most important asset. Particularly in the case of technology companies, where the future success of the company is dependent on the founder remaining with the company. Accordingly, it is important for an emerging growth company to prepare for the unfortunate chance that the founder of the company or key personnel cannot carry out their responsibilities. Every technology business employs people whose contributions are of vital importance. In a small business, these key employees have a more direct effect on the bottom line, because you don’t have multiple employees with the same skill sets and levels of talent. If your key employee’s departure is planned, as in the case of retirement or voluntary termination, you can prepare for the loss and take steps to minimize its impact. However, if the employee becomes disabled or dies, the loss is unpredictable and leaves your business exposed to financial risks.

If a key employee dies, the employer receives the policy’s income tax-free death benefit and can apply it towards business expenses or losses caused by the employee’s death.