Key Person Insurance

Many businesses have a shining star – whether that person is the founder, an amazing salesperson or an innovative thinker. What would happen if that talent were lost?

A key person life insurance policy from Nationwide® may help make sure your company never has to find out.

How does key person life insurance work?
Replacing a key person takes time and money and could possibly cost the business valuable clients during the transition. The tax-free policy proceeds from key person life insurance can cover financial losses that occur at the death of a key person. This helps assure continuity of the business for employees, customers and creditors. And it can serve to affirm the key person’s value to your business, which may strengthen the relationship.

Other things to know about key person insurance:

Coverage is a business asset that enhances your company’s creditworthiness for commercial borrowing.
The policy’s cash value may be available to your business through a withdrawal or loan if needed.
The policy can be transferred to the employee at retirement as a bonus.
The business pays the premiums and they are non-deductible.
The death benefit and any guarantees are subject to the claims-paying ability of the issuing insurance company.
Talk to your investment professional today about protecting your business with key person life insurance. Don’t have an investment professional? Learn more about what an investment professional can do for you and how to choose one. Then use our professional locator to find one.

What you should consider before you decide
Keep in mind that investing involves market risk, including possible loss of principal. As your personal situations change (i.e. marriage, birth of a child or job promotion), so will your life insurance needs. Care should be taken to ensure these strategies and products are suitable for your long-term life insurance needs. You should weigh your objectives, time horizon and risk tolerance as well as any associated costs before investing.

Also, be aware that market volatility can lead to the possibility of the need for additional premium in your policy. Variable life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as gender, health and age, underlying fund charges and expenses, and additional charges for riders that customize a policy to fit your individual needs.

The statements made above assume the policy remains in force, it isn't a modified endowment contract and the policy qualifies as life insurance under Internal Revenue Code, Section 7702. Outstanding loans and partial surrenders will reduce death benefits and may result in additional premiums to avoid a lapse. If the policy lapses, loans and partial surrenders in excess of basis will be subject to ordinary income tax.

Keep in mind that neither Nationwide nor its representatives give legal or tax advice, so you may want to discuss your specific situation with your attorney or tax advisor.

Life insurance is issued by Nationwide Life Insurance Company, or Nationwide Life and Annuity Insurance Company, Columbus, Ohio.

The general distributor is Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation.