In a Key Person Life Insurance Policy, who is typically the owner and beneficiary?

In a Key Person Life Insurance Policy, the employer is typically both the owner and the beneficiary of the policy. This structure reflects the purpose of the policy, which is designed to protect the business in the event of the untimely death of a key employee whose contributions are vital to the company's success. By owning the policy, the employer has control over it and can make decisions regarding premiums and coverage.

As the beneficiary, the employer receives the death benefit, which can be used to cover expenses such as recruiting and training a replacement, settling outstanding debts, or mitigating the financial impact on the business. This arrangement reinforces the financial security of the company while acknowledging the critical role of the key person in its operations.