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Modern Business Woman

Key Person Insurance

Should a key person fall terminally ill, is disabled or dies, the financial effect on your business could be catastrophic.  The business could suffer significantly as the impact could be:

  • A loss of Profit

  • An interruption to cash flow

  • An inability to make loan repayments

  • A change in shareholder control


In some instances, the financial impact could be so great, that the business is unable to continue.

Key Person Protection insurance pays out a lump sum to your Company and could significantly help your business to recover after such a tragic event.

For many businesses the biggest challenge is putting a value on the life of the key person. Although there are no set rules for determining this amount, the most common are:

  • Replacement value - The appropriate level of coverage could equal the cost of training and recruiting an adequate replacement.

  • Business life value - Estimate the loss of annual earnings if the key person were to die, and multiply that by the number of years the key person would have worked until retirement.

  • Multiple of salary - The death benefit could equal the employee’s annual salary, times the number of years a newly hired replacement employee might take to reach a similar skill level.

  • Contribution to profits - You may calculate the key employee’s value in terms of the amount of income (through sales revenue, for example) their departure would cost your company.

Etisicura will assist you in using Life Insurance products to cover your company for the loss of this key person.

Family at a Beach
Life & Savings
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Life & Savings
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Life & Savings
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Life & Savings
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