Don Clardy : Northwestern Mutual - What's Key for Your Business? : Article: What's Key for Your Business?

What's Key for Your Business?

All businesses, regardless of their size, have key employees — people whose contributions have a significant impact on the bottom line.

A key employee is anyone who makes a significant contribution to your company's financial success — a company president, talented sales director, a product designer, a partner who makes key management decisions, or an executive who is a TV advertising personality. And, unlike a machine, key employees are not so easily replaced.

Businesses that depend on a particular piece of equipment typically insure it. The loss of a key employee can have a serious financial impact. In addition to the human tragedy, the loss of a key person often means the loss of important customers, skill sets or business relationships.

Securing Protection through Insurance
Key person life and disability insurance can help a business protect itself against the financial risk associated with losing a key employee.

Key Person Life Insurance
Life insurance purchased on the life of a key person will pay the business, upon that employee's death, the proceeds of the policy. That benefit can be used to cover financial expenses and train the key person's replacement.

Key person life insurance can also provide a cash value benefit depending on the type of policy purchased. This cash value can be used for a few strategic business reasons while the employee is still living.

Key-Person Disability Insurance
When a key employee is disabled the loss is experienced in two ways. The first is the loss of profits that would have been attributed to the key employee. The second is the cost associated with finding a replacement. Key-Person Disability coverage is designed to provide your business with income during the disability of a key employee.

Planning for key employees can help small business owners offer attractive incentives to retain key employees, while planning for a potential business loss.

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Clarity Financial is a marketing name for Donald Scott Clardy and is not a broker-dealer, registered investment adviser, federal savings bank, subsidiary or other corporate affiliate of The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM), including its subsidiaries and affiliates, nor is it a legal partnership or entity. Northwestern Mutual Financial Network is the marketing name for the sales and distribution arm of NM and its subsidiaries and affiliates. Donald Scott Clardy is a Representative of Northwestern Mutual Wealth Management Company®, Milwaukee, WI (WMC), a wholly-owned company of NM and limited purpose federal savings bank. WMC is not a broker-dealer or insurance company. All WMC products and services are offered only by properly credentialed Representatives who operate from agency offices of WMC. Representative is an Insurance Agent of NM (life insurance, annuities and disability income insurance), and Northwestern Long Term Care Insurance Company (NLTC), a subsidiary of NM (long-term care insurance), and a Registered Representative of Northwestern Mutual Investment Services, LLC (NMIS), 6235 Morrison Blvd, Charlotte, NC 28211-3508, 704-365-2014, a wholly-owned company of NM, registered investment adviser, broker-dealer and member FINRA (www.finra.org) and SIPC (www.sipc.org). Representative may also be an Investment Adviser Representative of NMIS. NM and the Northwestern Mutual Financial Network - Greenville are not broker-dealers, registered investment advisers or federal savings banks. There may be instances when this agent represents insurance companies in addition to NM or its affiliates.

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