Question

What is the primary purpose of Key-man Insurance for businesses?How is Keyman Insurance different from traditional life insurance?

a.

To compensate the key person for their financial lossesIt is used to insure all employees of the company

b.

To provide life insurance for all employeesIt compensates with a fixed monetary sum

c.

To protect profits and offset losses in the event of a key person's death or incapacityIt is paid for by the key person

d.

To indemnify the company for any financial lossesIt only covers business-related losses

Posted under IC38 Life Insurance Agent Exam

Answer: To protect profits and offset losses in the event of a key person's death or incapacityIt compensates with a fixed monetary sum 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.Keyman Insurance compensates with a fixed monetary sum, which is different from traditional life insurance policies that may pay variable amounts.

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Q. What is the primary purpose of Key-man Insurance for businesses?How is Keyman Insurance different from traditional life insurance?
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