Key Person
A Key Person Assurance contract on the life of an individual pays out a lump sum if he or she dies or becomes permanently disabled. This will compensate your business for any financial losses suffered and afford you the resources to either search for and appoint replacement skills, or to adapt the business to the loss.
Even with a Buy-and-Sell Agreement between partners that takes care of the purchase of a deceased or disabled person’s interest in the business, Key Person Assurance may still be necessary. Without it, you could be left with a larger share of the business – which is now at risk without your partner’s skills and day to day contribution.
