Key person insurance is an important form of business insurance. In general, it can be described as an insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of the valuable business member. The aim is to compensate the business for losses and facilitate business continuity.
An employer may take out a key person insurance policy on the life or health of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company. The employer does this to offset the costs and losses which the employer is likely to suffer in the event of the loss of a key person.
Trust services provided by Southern Michigan Bank & Trustís Southern Financial Group Division are not FDIC insured. They may lose value and there is no bank guarantee.