How much key person insurance do you need?
Key person insurance gives a business room to recover if an owner or critical employee dies. There is no single right number, but a multiple of what that person is worth to the company is a solid starting point.
Use their compensation plus the profit and relationships that would be hard to replace. A ballpark is fine.
How the number gets set
The estimate above uses a multiple of the key person’s annual value. From there, the real figure is adjusted for business debt, ownership structure, and how badly operations would be hit. If the coverage is also meant to satisfy a loan, the lender’s requirement can drive the amount instead.
If this is for an SBA loan, start here: Does your SBA loan require life insurance?
This page is informational and not an offer of insurance. Coverage is offered through licensed carriers and agents via FundFit’s independent partners and is subject to underwriting.