Is the key employee the insured?

In a small business, the key person is usually the owner, the founders, or perhaps a key employee or two. The main qualifying point is whether the person's absence would cause major financial harm to the company. If this is the case, key person insurance is definitely worth considering.

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Checklist - Key Employee Life Insurance

Palm Beach Florida Checklist - Key Employee Life Insurance

Name: Palm Beach Florida Checklist - Key Employee Life Insurance
Brand: US Legal Forms
Rating: 4.67 (458 reviews)

Category:

Employment - Insurance

State:

Multi-State

County:

Palm Beach

Control #:

US-03079BG

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Instant download

Description

The business typically owns the policy, pays the premiums, and is the beneficiary. Most businesses purchase key-person insurance as a permanent life insurance policy; however, term life insurance may be less expensive and can be bought to cover the key person until he or she retires. The policy can be then transferred to the departing employee as a retirement benefit or to a different key person, upon the retirement of the original key person. Key-person insurance benefits are often used to buy out the insured person's shares or interest in the company. Buy-sell agreements, which require the deceased executive's estate to sell its stock to the remaining shareholders, legally facilitate this process. Proceeds from key-person insurance can also be used to recruit replacement management. The following form contains some critical questions you should ask your agent or broker when considering this type of insurance.

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A key man policy can also be an employee benefit, if the company transfers the life insurance policy to the executive or insured employee. Though key person life insurance premiums aren't tax deductible, the proceeds of the policy are usually provided to the company free of income tax.

In a small business, the key person is usually the owner, the founders, or perhaps a key employee or two. The main qualifying point is whether the person's absence would cause major financial harm to the company. If this is the case, key person insurance is definitely worth considering.

The types of life insurance generally used to cover key employee indemnification are term, whole, and universal life insurance.

The purpose of key person insurance is to help a small business maintain its financial footing after the death or disability of an owner or a core employee. Investors and lenders often require key person insurance on a business's management team.

Whole life insurance is the most popular type of permanent life insurance. It also pays out a death benefit, but unlike term life, most policies have a cash value, an investment-like, tax-deferred savings account, included in the policy.

Key person insurance is a life insurance policy that a business takes out on its most valuable employee or employees. A policy can also include a rider for disability coverage to help if a key employee is disabled. Key person insurance helps safeguard a small business if an imperative employee dies or becomes disabled.

Key person insurance is a type of life insurance policy that provides a death benefit to a business if its owner or another significant employee passes away, according to the Insurance Information Institute (III).

Since a business is usually the owner and beneficiary of a key person life insurance policy, the premiums paid by the business are generally not deductible. Furthermore, the premiums paid by the business are generally not taxable income to the employee.

Basic life insurance is a simple life insurance policy, often offered as part of a benefits package at a company along with group health insurance, paid time off and more. Companies often offer basic life insurance to their employees on a free or very inexpensive basis.

Who Owns the Life Insurance Policy? Usually, your organization owns the policy, pays the premium and is the beneficiary. Alternatively, your business and a key employee may agree to split the premium payments, cash surrender and death benefit value. The employee must agree to the company's purchase of this insurance.

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CRI is a member of PrimeGlobal, a worldwide association of independent accounting firms and business advisors. The benefits offered include medical, dental, and vision insurance.Employees may choose to enroll in plans that best meet their personal needs. 47 pagesMissing: Checklist - ‎Key When filing a charge with the Palm Beach County Office of. List persons in the following order: individual trustees or directors; institutional trustees; officers; key employees; highest compensated employees;. Organization's current and former officers, directors, trustees, key employees, and highest compensated employees? If "Yes," complete Schedule J . . CLATs, and advising clients on life insurance products.

Palm Beach Florida Checklist - Key Employee Life Insurance

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