Key Person Insurance
A life insurance policy that a company purchases on company's key executive's life. Investopedia Says:
The company is the beneficiary of the plan and therefore pays the insurance policy premiums. Key person insurance is needed if the sudden loss of a key executive would have a large negative effect on the company's operations. The payout provided from the death of the executive essentially buys the company time to find a new person or to implement other strategies to save the business.
Also known as Key Man Insurance, Key Woman Insurance, or Business Life Insurance. Related Terms:
Beneficiary
Life Expectancy
Life Insurance
National Associations of Insurance Commissioners - NAIC |