Critical Illness, Key Person Life Insurance
Shared ownership of a Critical Illness policy between the corporation and an executive or key employee can be a valuable retention tool while offering benefits and protection for both parties. The corporation can pay for the Basic Benefit portion of the policy while the executive/employee pays for the Return of Premium benefit. Should a critical illness occur the corporation will receive the benefit to enable it to compensate for the loss (temporary or permanent) of the executive/key employee. Should the executive/key employee remain healthy and employed by the company, they become eligible to receive the return of all premiums paid for the policy by both he and the company.
The loss of a key person due to death or disability can put a business in a difficult situation. The future profitability and viability of a company can be at risk should such an event occur. The use of Key Person Life Insurance where appropriate can help to mitigate these risks.