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Key Employee Insurance

Key Employee Insurance

Definition

Insurance whose purpose is to indemnify a business for the loss of earnings brought about by the death of a key officer or other employee. Life and/or disability insurance on one (or more) key person(s) whose loss or unavailability may cause loss of profit, loss of goodwill, or an increase in expenses. This type of insurance helps finance the search and training of a successor or compensate for a reduction in profits. Also called key person insurance.

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