What is the Definition of Key Person Insurance?

What is the Definition of Key Person Insurance?

Insurance on the life or health of a key individual whose services are essential to the continuing success of a business and whose death or disability could cause the firm a substantial financial loss.

Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/

Label: Insurance
Theme: Dictionary of Insurance Terms

Other Questions: What is the definition of Annuity?

What is the Definition of Key Person Insurance?

What is the Definition of Key Person Insurance?

You can find random definition and meaning of insurance terms below:


Meaning of Extended Replacement Cost Coverage in Insurance Terms

Pays a certain amount above the policy limit to replace a damaged home, generally 120 percent or 125 percent. Similar to a guaranteed replacement cost policy, which has no percentage limits. Most homeowner policy limits track inflation in building costs. Guaranteed and extended replacement cost policies are designed to protect the policyholder after a major disaster when the high demand for building contractors and materials can push up the normal cost of reconstruction. (See Guaranteed replacement cost coverage)


Meaning of Face Amount in Insurance Terms

For a fixed-amount whole life insurance policy, the amount of the death benefit payable if the insured person dies while the policy is in force.


Meaning of Facultative  Reinsurance in Insurance Terms

A reinsurance policy that provides an insurer with coverage for specific individual risks that are unusual or so large that they aren’t covered in the insurance company’s reinsurance treaties. This can include policies for jumbo jets or oil rigs. Reinsurers have no obligation to take on facultative reinsurance, but can assess each risk individually. By contrast, under treaty reinsurance, the reinsurer agrees to assume a certain percentage of entire classes of business, such as various kinds of auto, up to preset limits.


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