Insurance designed to protect a business firm against the loss of income resulting from the death or disability of a key employee.

Insurance designed to protect a business firm against the loss of business income resulting from the disability or death of an employee in a significant position.

Insurance that provides adequate compensation for the loss of services by disability or death of a vital employee, and resources with which to secure in a competitive market the services of a successor. Such insurance may be written to pay the employee if disabled, his heirs in the event of death, or his employer.

A special insurance policy on the lives of principal active shareholders in a corporation. Key-person policies can be used to fund buy-sell agreements as well as provide funds to continue the company in the event of one manager's death. There may be important tax implications when key-person insurance is taken out.