Sentences with phrase «man policy»

In some cases, the lender may even buy a key man policy on an executive in order to cover the cost of the loan if the key player dies or becomes disabled.

Key - man policies cover the lives of critical personnel.

If the key person unfortunately dies, the business generally receives the proceeds of the key man policy tax - free and can use the funds as it so chooses.

Your key man policy becomes effective when you complete the requirements needed and submit your initial check made payable to the insurance company.

Compensation Plans The life insurance payout from a key man policy provides an influx of cash that can be used to fund compensation plans for a company's executives.

A business can and should purchase a key man policy for each employee considered critical to the organization's success.

Employer owned life insurance policies including key man policies issued after August 17, 2006 may have death benefits that are subject to income taxation if certain requirements are not met.

People an employer might have covered by a key man policy include top salespeople, executives and other decision - makers, highly visible employees, and employees with unique knowledge or skillsets.

Formula's that may be used to establish a key person's value to the business for purposes of choosing the key man policy death benefit amount include:

In small businesses, the owner or founder should almost always have a key man policy on themselves so the business has a lifeline to sustain if they die.

Regardless of how much insurance is applied for, whether life or disability, or requested by the business, an insurance company will approve a key man policy based on their interpretation of the true risk exposure.

Partnerships may elect to purchase a special type of key man policy called survivorship life insurance.

Formula's that may be used to establish a key person's value to the business for purposes of choosing the key man policy death benefit amount include:

People an employer might have covered by a key man policy include top salespeople, executives and other decision - makers, highly visible employees, and employees with unique knowledge or skillsets.

«For example, your company may already hold a key - man policy on your life.

Unfortunately, if you have a key man policy issued after August 17, 2006 and you have not been compliant, your best bet to avoid potential income taxation is to scrap your current policy and start over!

In the case that you transfer ownership of the key man policy to the employee, however, they may be liable to pay taxes, since this transfer may be considered a form of compensation.

A key man policy is important if the loss of a particular employee would adversely impact your profits.

A key man policy can also be used as an employee benefit, since the life insurance policy can be transferred to the executive or insured employee by the company.

The key man policy's death benefit could be used to pay any debts, provide employee severance, shut down the business, and distribute any remaining funds to investors.

If the insured employee passes away, the key man policy's death benefit would be paid to the company free of income tax in most cases.

Key person insurance, also known as, key man insurance (a.k.a. key man policy) is a critically important form of business continuity planning.

Employers have policies referred to as key man policies that cover particularly significant employees in the event of their death.

When a business owner has an employee whose knowledge, experience, talent and / or skills are vital to the success of the business they can insure that employee with a key man policy.

Normally, businesses will use the funds received from a key man policy to cover expenses associated with finding capable replacements or to cover short term revenue deficits.

While significantly more expensive, there are many situations where a key man policy is crucial to obtaining financing, attracting an ideal investor, or just plain protecting the business.

The key man policy's death benefit could be used to pay any debts, provide employee severance, shut down the business, and distribute any remaining funds to investors.

DO N'T Let Your Policy Lapse: Once the key man policy is in effect, pay your premiums when due.

In the case that you transfer ownership of the key man policy to the employee, however, they may be liable to pay taxes, since this transfer may be considered a form of compensation.

A key man policy can also be used as an employee benefit, since the life insurance policy can be transferred to the executive or insured employee by the company.

DO Start Early: If it looks like your loan is going to be approved, start the process of acquiring a key man policy, if required.

If the insured employee passes away, the key man policy's death benefit would be paid to the company free of income tax in most cases.

A key man policy is important if the loss of a particular employee would adversely impact your profits.

A key man policy can be:

All insurance companies require a «mini physical» exam to obtain a key man policy.

When your key man policy is approved we will notify you immediately.

The key man policy can also be used to make up for a temporary loss of profits due to the loss of an important staff member.

Once the insurance company that will offer the top key man policy is identified, a brief telephone interview is required.

In many cases, the reason for buying a key man policy may be temporary.

As soon as the key man policy is effective, a collateral assignment agreement can be signed by the business owner and the bank.

The chief reason why term insurance is used for key man policies is its low cost.

Typically a businesses will use the funds received from a key man policy to cover expenses associated with finding capable replacements or to cover short term revenue deficits.

Consulting with an independent insurance professional to determine the exact need is the best strategy to assure you select the appropriate key man policy.

Shop for rates from several different life insurance agents and get them to sell you a key man policy.

Some businesses may choose to pay the higher premiums of whole or universal life insurance for key man policies.

Primarily, this tax benefit is applicable only if the main insurance policy is not issued under section 80DD or as a key man policy.

Key person or key man policies are paid for by the business and in the event that a key employee passes away, the payout from the insurance policy can be used to recruit, hire, and train a new employee.