MUST READ: What is key man insurance?
Key man insurance is a life insurance policy on an owner, founder or key employee of a business. Such people are considered critical to the success of the business — so critical, the business could fail without them.
The business is the beneficiary of key man insurance to help it avoid bankruptcy if the person who’s important to the company dies. If the business closes, the policy payout can be used to settle debts, pay investors and help with selling the business.