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Key-Man Insurance is meant to insure the viability of the company in case of a key personís death.  For example, the death benefit may be used to hire someone to fill the role left vacant by the deceased person.  The death benefit may also be used to buy-back the shares (if he/she was a shareholder) from the deceasedís estate rather than bring on an unfamiliar person to leadership.  Key-Man insurance may also be used to provide a portion of the death benefit to the beneficiary of the key-person. 

Although the preceding examples seem as simple as purchasing life insurance and signing an agreement, it may be fairly complex.  Details such as who pays the premium, are their taxes involved, how is the money distributed at the time of a death, are there taxes due on the death benefit, what happens if a key-person separates from the company, etc. 

For more information, please contact Bridgeport Benefit Advisors.

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The material on this page is intended as general descriptions of the concepts presented.  It is for educational purposes only and it not intended to provide specific financial or tax advice.  These descriptions cannot take into account your specific conditions and situation including the data required for underwriting purposes, financial circumstances, risk tolerance, and other factors.