Without your employees, your business would never thrive. With that being said, you likely have a few workers who are more essential to your business than others. These key individuals help run the day to day operations and your business would struggle without them. It might be a human resources manager or an office manager. It could be a business partner. What would you do if this individual was hurt or injured and could no longer work?
Would your business falter? You may be able to shield your business from such problems by using key person disability insurance.
Protecting The Most Valuable
Ultimately, some people are more important to your business than others. If one of these people get sick or injured, they may no longer be able to work. You may experience unexpected and tiresome challenges. For instance, you may lose a skilled worker and that could lead to a disruption of your business. It may also cause your business to lose revenue.
If you lose the wrong person, some customers may be hesitant to work with your business. Furthermore, you’ll have to hire someone to replace this individual and that is going to cost a lot of money. You might be able to protect yourself from this problem by acquiring Key Person disability insurance. This insurance is designed to help Canadian businesses deal with the financial burden of losing a key contributor.
This policy will be owned and paid for by your business. If a key employee is injured or sick, the insurance will pay benefits to your company. You’ll be able to use the benefits for numerous purposes including those below.
- To pay for a temporary replacement
- Prove that your company is financially stable to customers, shareholders, and creditors
- Minimize the costs associated with finding, recruiting, and training a new worker
The only downside to Key Person disability insurance is the fact that the costs are not tax-deductible. However, there is an upside. The benefit you receive from your policy will not be taxed. The benefit is tax-free. Furthermore, the key employee will still be able to obtain an individual disability insurance plan to protect their income.
Taking Advantage Of Key Person Policy
As a business owner, you will indeed want to use key person insurance to protect your Canadian business. You never know when someone is going to get sick or injured so you have to be ready for anything. The chilly weather during Canada’s winters could lead to a slip and fall. So, you should learn more about key person disability insurance. Before you can receive benefits, the covered individual needs to be classified as “total disability”.
This means that the individual will no longer be able to perform his or her essential duties. During this time, your employee must not be working a similar job with comparable responsibilities.
What To Consider When Choosing An Insurance Firm
When looking for key person disability insurance, you’ll need to choose the right insurance provider. This is one of the most vital components. A bad company will lead to numerous problems while a great company will make your life easier. You’ll want to use the tips below when looking for a company offering key person disability insurance.
First and foremost, the insurance provider should provide you with guaranteed premiums. The company should promise that the premium is going to remain the same. Furthermore, the company shouldn’t be able to cancel the insurance policy unless the premiums aren’t paid or the employee passes away.
You’ll also want to choose a company that offers convenient payment methods. You should be able to pay one lump sum or monthly installments. You should be able to pay a combination of both too.
After an elimination period, your premiums should be waived while the employee is disabled. Premiums paid during the elimination period should be refunded. The employee must be disabled for a specific time before benefits are paid. This is known as the elimination period.
Reaching Elimination Period
Also, the principal should combine several periods of disability to ensure that the customer can reach the elimination period.
Be sure to look at these things when looking for an insurance provider. You’ll also want to work with ProfessionalsCoverage since they can lead you in the right direction.