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Companies many times will purchase key man insurance to cover some employees who are keys to the success of future earnings or well-being of the firm. In the event of death, the company receives the life insurance that was paid to cover this “key” person or key man. This is not the same as the life insurance the company pays on all of its employees, which is payable to the employee’s designated beneficiary.
Ask for this employee benefit when searching firms. You may find that your current insurance firm will not do this for your key people. Look elsewhere. When you interview insurance firms offering key man insurance, ask that the firm also make available to those specific employees a life insurance policy at a healthy discount. This will be seen as a good employee benefit and should help to persuade those individuals to stay with your firm.
Life insurance firms should be motivated by this additional revenue. The life insurance company will most likely know a lot about the health of these key individuals if they are going to supply life insurance. They also should have no problem wishing to sell another policy directly to the same individual given that they already have accepted all known risks when they issued the first policy. This will be extra revenue on a known covered individual.
