How does keyman insurance differ from individual life insurance?
Keyman insurance differs from individual life insurance’s purpose, ownership, and beneficiaries. Keyman insurance is taken out by a business on a crucial employee, with the business owning the policy and receiving the payout if the keyman passes away or becomes terminally ill. The benefit helps the company manage financial losses, replace the individual, or cover outstanding debts.
In contrast, individual life insurance is purchased by a person to provide financial security for their family or dependents. The policyholder owns the coverage pays the premiums, and their chosen beneficiaries receive the payout upon death. While both policies provide a lump sum benefit, keyman insurance is designed to protect a business, whereas individual life insurance safeguards personal finances.
