Key person life insurance has long been a cornerstone of business protection, offering a financial safety net in the event of a key leader’s death. But statistics reveal a more pressing reality, a 45-year-old executive is three to four times more likely to experience a disability lasting more than 90 days than to die before age 65.
When a key executive becomes disabled, the impact can be immediate and severe: lost revenue, stalled operations, disrupted client relationships, and costly recruitment efforts. Advisors who address these risks head-on ask three critical questions:
The answers often reveal a serious coverage gap.
Key Person Disability Insurance provides businesses with the liquidity needed to weather the loss of a critical executive due to disability. The lump-sum benefit can offset lost revenue, fund a leadership search, or stabilize operations during a leadership gap.
Unfortunately, traditional domestic policies often cap benefits around $750,000 - far below what many high-value companies require. For businesses valued at $2 million or more, the excess and surplus lines market, including Lloyd’s of London, offers significantly higher limits to match the real financial risk of losing a key leader.
When an executive at a mid-sized private company backed by institutional investors returned to the CEO role after underperformance under new leadership, he brought with him $18 million in personal equity - making his presence essential to the company’s success.
While the board had already secured $10 million in key person life insurance, there was no matching disability coverage. Exceptional Risk Advisors worked with the advisor to structure a $10 million Key Person Disability policy, creating a comprehensive life and disability protection plan that safeguarded enterprise value and ensured business continuity.
Read the full case study to see how the solution was structured, the underwriting process, and how the advisor strengthened their position as a strategic partner to the executive team and board.
If your clients are in the mergers and acquisitions space, traditional life insurance isn’t always enough (or even possible) due to underwriting hurdles or deal timelines. In Insurance Journal, Chris Lack’s article, Why Key Person Disability and Accidental Death Coverage Matters in Mergers & Acquisitions, breaks down how high-limit disability and short-term AD&D solutions can protect leadership, preserve deal value, and move transactions forward with confidence.
Download the full Insurance Journal article here