Key Person and Buy/Sell Life Insurance


Hello I’m Chip Fridrich. Let’s discuss key person life insurance and buy/sell life insurance.  These two types of life insurance products are generally used by businesses and organizations as key parts of their daily overall operations and succession planning.

We know that there are often key individuals in any organization or business that if they were to unexpectedly pass away it would potentially cause a financial burden due to their input, talent, knowledge, or financial contribution. This person could be identified as someone who essentially would be extremely hard to replace. In this situation, life insurance can be a great instrument and asset to have as a business tries to pick up the pieces after a key employee or partner’s death.

Normally, these life policies are term insurance based and fixed at a certain premium level and time period. The amount of insurance needed can often be subjective in nature but can be analyzed by the business along with their agent and accounting professional. It is essential that the ownership and beneficiary of these policies be correct from the start of the application process to the policy issuance. Almost always, the business will serve both capacities.

Buy sell life insurance is used by businesses as an inexpensive and practical way to fund a buyout of ownership from another party when partners are involved and a death occurs. The insurance can be taken out on the life of the partner (or multiple partners) and in turn the death benefit proceeds can be used to buy out the deceased partner. This is used quite frequently in small to medium sized businesses and organizations. As stated before with key person insurance, it is vital that the ownership and beneficiary designations are scrutinized on the front end as well.

Our agency has the capability and knowledge to assist your business in providing a vast assortment of life insurance products from worldwide reputable carriers. We also have access to accountants, estate planners, and lawyers whom we can refer you to. These professionals can assist you in your perpetuation needs for your company with expert advice. If this is attractive to you for further discussion, drop us an email at: and we can start a conversation.

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