loss of key player

How to protect your business if a KEY employee dies

Do you have a plan in place if you lose a KEY player on your team?

If someone is important to your business (not the rank and file, but someone who is seemingly irreplaceable) dies or leaves the company, are you prepared?

1. Offset revenue losses

2. Funds may be needed to ensure business continuity

You need to make sure to have the funds in place while you bridge the gap training a new person.

3. Funds to recruit and train qualified talent

Your solution: Key Person Life Insurance

This ensures that you have the money available when you need it most.

How it works:

  • Company buys life insurance on key personnel (if they aren’t around, the business would suffer)
  • If a key person on the policy dies, the company collects from the life insurance that was purchased.

Obstacles:

  • Insurability
  • Make sure to revisit your strategy to ensure it isn’t out of date
  • Understand how to value a key person
  • Premiums are NOT tax-deductible

3 Basic Ways to Value Key People

1: Multiples of total compensation

2: Cost of replacement

3: Contribution to the company profits

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Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Gold Family Wealth, LLC), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Gold Family Wealth, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Gold Family Wealth, LLC is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the Gold Family Wealth, LLC’s current written disclosure statement discussing our advisory services and fees is available upon request. If you are an Gold Family Wealth, LLC client, please remember to contact Gold Family Wealth, LLC, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services.

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