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Protecting your business from unexpected tragedy is something most entrepreneurs don't want to think about, but ignoring this crucial planning could cost you everything you've built.

Key man insurance represents one of the most important protection strategies for small to medium businesses, yet it remains widely misunderstood and underutilized. We break down exactly how this vital coverage works - when a company takes out insurance on an essential team member whose absence would significantly impact operations, the policy provides financial resources to weather the storm if that person dies or becomes permanently disabled.

But the devil is in the details. The tax implications alone require careful consideration - should you make premiums tax-deductible and accept a taxable payout, or forgo the deduction for a tax-free benefit? We walk through the four critical requirements that determine whether the policy becomes part of the insured's estate (with potential estate duty liability), a particular concern for family businesses where relatives might benefit indirectly. Understanding these nuances could save your company from unexpected financial burdens during an already difficult transition.

The podcast explores practical questions too: How do insurers determine who qualifies as a "key person"? What documentation is needed? How much coverage is appropriate? Whether you're thinking about your star salesperson, technical genius, or the founder who holds all the client relationships, this episode provides essential guidance on protecting your company's future. Don't wait until it's too late - proper planning with professional guidance ensures both your business and the families who depend on it remain secure no matter what happens.

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