TN Life Insurance-Key Person Life Insurance

Here are some common Questions & Answers regarding Key Person Life Insurance:

Question: Who Is A Key Employee?

Answer: A key employee in your Tennessee business would be someone who possesses specialized skills in one or more areas of your business, such as recruiting, management skills, or technical skills. The loss of this person would have a significant impact on the business.

Question: What Is The Purpose of a Key Person Life Insurance Policy?

Answer: Obviously, no amount of insurance would actually replace such an important member of your organization. The proceeds from the life insurance policy allows you the time to properly recruit and train the right person to fill the vacancy.

Question: Who Is Insured Under A Key Person Life Insurance Policy?

Answer: The life insurance policy is issued on the life of the key employee. This person would, of course, have to meet all the underwriting requirements of the insurance company.

Question: Who Owns the Key Person Life Insurance Policy?

Answer: The life insurance policy is owned and controlled by the Tennessee business. Any changes to the policy, once issued, can only be made by the business.

Question: Who Pays The Premiums For A Key Person Life Insurance Policy?

Answer: All life insurance premiums are paid by the business.

Question: Who Will Receive The Proceeds From The Life Insurance Policy?

Answer: The business is not only the owner and premium payor of the life insurance policy, but also receives the insurance proceeds upon the death of the key employee.

Question: Does the Key Employee's Family Have an Interest in the Life Insurance Policy?

Answer: No, neither the employee nor any member of the employee's family have any interest in the life insurance policy.

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