Tag Archives: insurance nh

Protect Your Key Assets with Key-person Life Insurance

Part of the series provided by Chalmers Insurance Group

Most organizations employ at least one individual who is essential to the company’s success. This person may be a partner, majority stockholder or an individual with expertise that’s unmatched throughout the rest of the company. If this person’s exit from the company is planned, such as through retirement or voluntary termination, then you can prepare for the loss and take the necessary precautions to minimize the impact.

However, if the departure is unplanned due to a death, disabling accident or sudden resignation, then the company is exposed to financial risks. If your organization employs individuals who are vital to its success, consider key-person life insurance to offset your risk. This coverage can protect your organization’s solvency in the event that you lose the key person or people without warning, and also the investments made by lenders and investors to the company.

How Does Key-person Life Insurance Work?

It’s important to know how key-person life insurance works while you consider if it’s the right fit for your company:

  • The employer purchases key-person life insurance on the key individual(s).
  • The employer is the beneficiary of the policy and applies for and owns the coverage. If the key employee dies prematurely, the policy pays out to the employer.
  • In some cases, IRS guidelines allow for tax-free dollars from the policy to be put towards finding, hiring and training a replacement employee, compensation for lost business during the transition, and financing timely business transactions.
  • Depending on the specific language in the policy, it can sometimes be transferred to a departing key employee as a retirement benefit.
  • The policy can be used to buy out the key employee’s shares or interest in the company.
  • Premiums are based on several factors, including the key employee’s age, physical conditions and health history. The amount of coverage also affects the premium.

Advantages of Key-person Life Insurance

Key-person life insurance has a number of advantages that can help mitigate your company’s risks:

  • Policies can be easily implemented and don’t require IRS approval. Your business only needs to prepare an annual report for the IRS.
  • If all IRS guidelines are followed, the policy’s benefits may be paid to the company tax-free.
  • Customers, creditors, lenders and stockholders have the assurance that the business has a continuation plan and coverage in place.
  • There’s flexibility when using funds paid by the policy.

Considerations before Purchasing Key-person Life Insurance

The following points should be considered before purchasing key-person life insurance:

  • Estimate the value of your key employees. Think about the projects that would be lost without these people, the amount of sales generated by these people and costs associated with replacing them.
  • Determine if this coverage is necessary, as credit insurance will cover outstanding loans and debts.
  • Create a business continuity plan that outlines how your business will function if you lose key employees.

Chalmers Insurance Group understands that your key assets need protection and we’re here to assist you. Please contact us today at 800-360-3000 to learn more about our key-person life insurance solutions and other ways to mitigate your risks.

Advertisements

All About Automobile Policy Coverage

Part of the series provided by Chalmers Insurance Group

An automobile insurance policy is designed to provide you with a level of protection against property, liability and medical costs if you are involved in a wreck:

  • Property coverage pays for damage to or theft of your car.
  • Liability coverage pays for your legal responsibility to others for bodily injury or property damage. Most other states require car owners to purchase a minimum of bodily injury and property damage liability insurance.
  • Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

Comprehensive and Collision Coverage

Collision: Covers damage to your car when your car hits, or is hit by, another vehicle or other object. This coverage is not required by a state, but if you have a loan or a lease, then the lien holder will require it.

Comprehensive: Covers your vehicle, and sometimes other vehicles you may be driving, for losses resulting from incidents other than collision. This coverage is not required, but a lender may insist that you carry it until your loan is paid off.

Types of Liability Coverage

Bodily injury liability (BI): This covers injuries that you, the designated driver or policyholder cause to someone else. It does NOT cover the cost of damage to your vehicle, or to you or other people on your policy. It is mandatory in most states.

Property damage liability (PD): Covers you or someone driving the car with your permission if the car damages someone else’s property. It also provides you with legal defense if another party files a lawsuit against you.

Medical payments (MP) or personal injury protection (PIP): This no-fault coverage provides medical expenses to you and your passengers injured in an accident.

Uninsured and underinsured motorist coverage (UM or UIM):  This coverage will reimburse you if of you are hit by an uninsured or hit-and-run driver or when an at-fault driver has insufficient insurance to pay for your total loss.

Top Ways to Save on Your Auto Premium:

  • Consider raising your deductible.
  • Keep up your good driving record.
  • Drive a car with safety features such as anti-lock brakes and airbags.
  • Install an anti-theft device.
  • Ask about our multi-policy discounts.

We’re Here to Help

Did you know that you need specific coverage when vehicles are used for business use? Or that ride-share and taxi services are usually excluded under personal insurance? Call Chalmers Insurance Group today at 800-360-3000 to learn more about all of our automobile insurance and risk management solutions.