Question

What is the primary purpose of Key-man Insurance for businesses?

a.

To compensate the key person for their financial losses

b.

To provide life insurance for all employees

c.

To protect profits and offset losses in the event of a key person's death or incapacity

d.

To indemnify the company for any financial losses

Posted under L05 Applications of Life Insurance IC38 Life Insurance Agent Exam

Answer: (c).To protect profits and offset losses in the event of a key person's death or incapacity Explanation:Key-man Insurance is taken by businesses to protect profits and offset losses that may occur due to the death or incapacity of a key person.

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