Some People Aren't Easy to Replace. Neither Is What They Bring to Your Business.
Your business may depend on an owner, executive, top producer, rainmaker, or specialized employee whose revenue, relationships, leadership, or expertise would be difficult to replace.
Key Person Insurance helps protect the business from the financial impact of losing someone critical to its success.
Talk To Us About Protecting A Key PersonLife Insurance · Disability Protection · Independent Multi-Carrier Solutions
Who Does Your Business Depend On?
A key person isn't defined by their title. It's someone whose leadership, revenue, relationships, specialized knowledge, or expertise has a significant impact on the success of the business.
Founder / Owner
Leadership, vision, and relationships that drive the company.
Business Partner
Critical management, operational, or financial responsibilities.
Executive / Leader
Decision-making and expertise that would be difficult to replace.
Top Producer
A salesperson or producer responsible for significant revenue.
Rainmaker / Relationship Holder
Someone whose relationships directly influence clients, contracts, or opportunities.
Specialized Employee
Unique technical knowledge, credentials, or skills the business depends on.
The question isn't just, “Can we replace them?”
It's, “What happens to the business while we try?”
What Happens If a Key Person Dies, Can't Work — or Suddenly Leaves?
Your business can feel the financial impact of losing a critical person long before you've had time to replace what they brought to the company.
If They Die
The Loss Is Immediate
Revenue, leadership, client relationships, specialized knowledge, and confidence in the business can be affected overnight.
If They Can't Work
The Business Still Has to Operate
A serious illness or injury could keep a key person from working for months — or longer — while the company continues to face payroll, overhead, client commitments, and other obligations.
If They Leave
Their Value Can Leave With Them
Important relationships, institutional knowledge, specialized expertise, and revenue may be difficult — or take significant time and money — to replace.
You Can't Prevent the Unexpected. You Can Prepare the Business for the Financial Impact.
Insurance can provide financial protection for covered events such as death and disability, while broader business planning can help prepare for other unexpected departures.
Protect the Business If They Die — And If They Can't Work.
A key person doesn't have to be gone permanently for their absence to create a serious financial problem. Life and disability insurance can protect the business against two very different risks.
If They Die
Key Person Life Insurance
The business owns the policy and is generally the beneficiary. If the insured key person dies while the policy is in force, the death benefit can provide capital to help the business:
- Offset lost revenue or profits
- Recruit and train a replacement
- Maintain operations and cash flow
- Meet important business obligations
- Give the company time to adjust and recover
If They Can't Work
Key Person Disability Insurance
A serious illness or injury could prevent a critical person from working for months — or longer. Key Person Disability Insurance can provide funds to help the business:
- Recruit and train a replacement
- Cover temporary staffing costs
- Manage transition expenses
- Maintain operations during the disruption
- Reduce the financial impact of their absence
Death Can Remove a Key Person Permanently.
Disability Can Remove Their Contribution When the Business Still Needs It Most.
Want a Quick Overview of Key Person Protection?
See how Key Person Life and Key Person Disability Insurance can help a business prepare financially for the unexpected loss of critical talent.
2-minute read · Principal Financial Group
The Cost of Losing a Key Person Goes Far Beyond Their Salary.
A key person's value may be tied to the revenue they generate, relationships they maintain, knowledge they hold, and responsibilities the business depends on every day.
Lost Revenue
Sales, production, or opportunities tied directly to the key person's contribution may be disrupted.
Client & Relationship Loss
Important customers, referral sources, vendors, or strategic relationships may be tied closely to that individual.
Recruiting & Replacement
Finding someone with comparable experience, skills, or relationships can be expensive — and take time.
Training & Transition
Even the right replacement may require months to become fully productive.
Operational Disruption
Other owners and employees may have to absorb critical responsibilities while the business adjusts.
Business Value & Financial Stability
The loss of a critical person can affect cash flow, confidence in the company, and relationships with creditors or other stakeholders.
Replacing the Person Is Only Part of the Cost. The Business Has to Survive the Transition.
Evaluate My Key Person RiskComplimentary · No obligation to purchase
How Much Is Your Key Person Worth to the Business?
There's no one-size-fits-all number. The right amount of protection starts with understanding the financial impact their loss could have on the business.
Revenue & Profit Contribution
How much of the company's financial performance depends on this person?
Replacement Cost
What could it cost to recruit someone with comparable skills, experience, and relationships?
Transition Time
How long could it take before a replacement is fully productive?
Client & Relationship Risk
How much business could be affected by relationships connected to this person?
Business Obligations
Could their loss affect debt, credit, contracts, or other financial commitments?
You Don't Need to Guess at the Number.
We'll help you evaluate the exposure and determine an appropriate amount of coverage before you apply.
Request My Complimentary Key Person EvaluationNo fees · No obligation to purchase
Want to See a Sample Key Person Analysis?
Principal provides sample analyses showing how coverage considerations can differ depending on whether you're protecting a business owner or a key employee.
Educational sample resources from Principal Financial Group. Actual coverage, availability, and pricing are subject to individual circumstances and underwriting.
Finding the Right Coverage Is Only Half the Job.
Key person cases can involve large coverage amounts, financial underwriting, medical underwriting, and different carrier guidelines. We help determine where your case fits before you apply — then shop the market for the right combination of coverage, pricing, and underwriting.
90+ Carriers
We shop across a broad carrier market rather than relying on one company's solution.
We Shop the Price
Compare competitive options while considering the coverage and underwriting fit.
Pre-Underwriting
We evaluate the case before application to help identify potential issues and the right carrier path.
Fast Underwriting Options
Qualified applicants may have access to accelerated or no-exam underwriting options.
Large & Complex Cases
Higher coverage amounts and more complicated cases receive the underwriting attention they require.
Life + Disability Solutions
We can coordinate both sides of Key Person protection rather than addressing death risk alone.
The Goal Isn't Just to Get a Quote. It's to Get the Right Coverage Placed.
One point of contact. Multiple carriers. A strategy built around your business and your key person.
Explore My Key Person Coverage OptionsKey person have health or underwriting challenges?
Explore Hard-to-Place Life & Income Protection →Access to Leading Business Protection Carriers
We work with a broad range of leading insurance carriers and specialized markets. The companies shown below are just some of the carriers available to us as we evaluate products, underwriting, and coverage strategies for your business.
One business. Multiple solutions. If your valuation identifies a protection or planning need, we can compare multiple carriers, products, and underwriting approaches to help match the right solution to your business.
Explore My Options →Key Person Insurance FAQs
What is Key Person Insurance?
Key Person Insurance helps protect a business from the financial impact of losing an owner, executive, employee, or other individual whose contribution is important to the company's success.
Depending on the coverage selected, protection may address the death or disability of a key person.
Who can be considered a key person?
A key person can be an owner, partner, executive, top producer, salesperson, technical specialist, or other critical employee whose absence could significantly affect revenue, operations, relationships, financing, or the value of the business.
It's not the person's title that matters most — it's their financial importance to the company.
Can a business owner be a key person?
Yes. An owner may be one of the company's most important key people, particularly when the business depends heavily on their leadership, expertise, relationships, reputation, or revenue production.
Who owns a Key Person Insurance policy?
In a typical Key Person arrangement, the business owns the policy, pays the premiums, and is the beneficiary, while the key person is the insured.
The structure can vary depending on the business and its planning objectives.
What can a Key Person Life Insurance benefit be used for?
The business generally determines how to use the proceeds. The funds can help:
- Offset lost revenue or profits
- Recruit and train a replacement
- Cover temporary staffing or transition costs
- Maintain operations and cash flow
- Meet financial obligations
- Give the company time to adjust and recover
What is Key Person Disability Insurance?
Key Person Disability Insurance addresses a different risk: the key person is alive, but a covered illness or injury prevents them from working.
Depending on the policy, benefits can provide the business with funds to help manage replacement, staffing, transition, and other financial costs associated with the key person's disability.
Should I use term or permanent life insurance for a key person?
Either may be appropriate.
Term Life Insurance can provide substantial death-benefit protection for a defined period at a generally lower initial premium.
Permanent Life Insurance can provide longer-term protection and may build cash value depending on the policy.
The appropriate structure depends on how long the need is expected to exist, the amount of coverage required, the business's objectives, and budget.
How much Key Person Insurance does my business need?
There isn't one number that works for every company.
Coverage can be evaluated using factors such as the key person's revenue and profit contribution, compensation, replacement costs, transition time, client relationships, financial obligations, and overall economic impact on the business.
We can help evaluate the exposure before determining an appropriate coverage amount.
Can we insure more than one key person?
Yes. A business may have multiple key people, and the appropriate amount and type of protection may be different for each person.
Does the key person have to agree to the insurance?
Generally, yes. Employer-owned life insurance involves notice and consent requirements, and the insured must participate in the insurance application and underwriting process.
Are Key Person Insurance premiums tax deductible?
Generally, premiums for Key Person Life Insurance are not deductible when the business is directly or indirectly the beneficiary. Tax treatment can depend on the specific arrangement and applicable law.
Business owners should consult their tax and legal professionals regarding their particular situation.
Is the Key Person Life Insurance death benefit tax-free?
Key Person Life Insurance death benefits are generally received income-tax free. However, employer-owned life insurance is subject to specific federal requirements, including notice and consent requirements, and tax treatment can depend on how the policy is structured.
Business owners should consult their tax and legal professionals regarding their specific situation.
What happens to the policy if the key person leaves the company?
The available options depend on the policy type, ownership, carrier, and circumstances. The business may have options such as maintaining the policy, transferring ownership where permitted, or terminating coverage.
We can review the policy and available options when a key person leaves.
Is Key Person Insurance the same as Buy-Sell Insurance?
No.
Key Person Insurance protects the business from the financial impact of losing a critical person.
Buy-Sell Insurance is generally designed to help fund an ownership transfer following events addressed by a Buy-Sell Agreement.
A business may need both because they solve different problems.
What if our key person has health problems or has already been declined?
A previous decline or medical condition does not necessarily mean coverage is unavailable.
Different insurance carriers have different underwriting guidelines. We can evaluate more challenging cases through our underwriting resources and determine whether other carrier or coverage options may be available.
Explore Hard-to-Place Life & Income Protection →How quickly can Key Person Life Insurance be approved?
It depends on the coverage amount, age, health history, carrier, and underwriting path.
Some qualified applicants may be eligible for accelerated or no-exam underwriting, while larger or more complex cases may require traditional underwriting.
Do you charge a fee for your Key Person Insurance service?
No. There is no fee or charge for our insurance placement and concierge services — even if you ultimately decide not to purchase a policy.
You pay only the premium for any insurance coverage you choose to purchase. When a policy is placed, we are typically compensated by the insurance carrier.
Our service can include case review, coverage strategy, pre-underwriting, carrier and policy selection, application management, underwriting coordination, and policy placement.
You'll know the coverage and premium before deciding whether to proceed.
Solutions Built for Business Owners
From commercial loan compliance to continuity planning, we help owners safeguard what they've built with specialized protection designed for every stage of growth.
LEARN MORECommercial Loan Protection
Covers SBA loans and commercial mortgages against death or disability. Delivers fast life and disability insurance collateral assignments to satisfy bank-mandated compliance, protect personal assets, and lock in critical business financing without delays.
Individual Income Protection
Individual, custom portable own-occupation disability coverage offered in a group setting. Delivers Guaranteed Issue (GI) underwriting (no medical exams) and exclusive multi-life group discounts for executives, key employees, and professional groups. We offer side-by-side carrier quotes.
Business Overhead Expense
Pays your actual business expenses while you're disabled — rent, employee salaries, utilities, insurance, and loan payments. Keeps the doors open.
Key-Person Insurance
Protects your business from the financial impact of losing a critical employee from death or disability — covering lost revenue, hiring costs, and the disruption of losing a key person.
Business Buy-Sell Insurance
A buy-sell agreement is a legal contract stating how business partners will proceed if one partner needs to exit the business — disability or death.
Group Employee Benefits
Group health, dental, vision, life, and disability solutions — featuring tax-advantaged ICHRA plans, Guaranteed Issue (GI) underwriting, and volume discounts to control overhead.