Are you a business owner? Have you thought about what would happen if you lost a key employee due to death?
Cincinnati Life Insurance Company can provide personal guidance about business continuity planning using Termsetter ROP. Your clients receive funds to offset costs related to a key employee’s death or a refund of their paid base premiums (excluding rider and substandard premiums) when that key employee survives the policy term.
Company: Reybright Consulting
CEO: John Keyperson, 43 years old
John’s Role: leadership, company operations, management of client and bank relationships, revenue generation.
Risks: If John, CEO of Reybright Consulting for seven years, were to die unexpectedly, Reybright would need to:
- Hire an experienced, knowledgeable employee to take over John’s responsibilities.
- Reassure clients of Reybright’s business continuity.
- Contact creditors to establish a relationship with a new Reybright contact.
- Minimize any disruption in sales and revenue.
Recommendation: Reybright purchases a Termsetter ROP policy from Cincinnati Life
- Face amount = $1 million, 10 times John’s annual compensation of $100,000
- Coverage – payment to Reybright through death benefit or through return of premium feature.
- Options at end of term – Reybright could choose:
- Reduced paid-up policy.
- Return of all paid base premiums.
- Conversion to a permanent policy.
- Transfer the policy to John as compensation for his service.