The answer is any business employee who holds a key person insurance policy in his or her name. The employee could be the business owner or a non-owner employee whose very specialized abilities are critical to the operation of the business and difficult or costly to replace. In order to determine whom the most valuable player is, two factors must exist.
Reviews are mixed as to the best way to determine the financial worth of a key player.
Many guidelines are used in estimating the dollar value of a key employee. Other guidelines involve either a determination of the employee's replacement cost or an estimation of lost profits or credit. If the key employee has reached a salary cap, employers can ensure their loyalty by offering the policy as a bonus. If the employee remains with the company without need for the policy, it is either renewed in his or her name or turned over to the insured at the end of the term. The need for key person insurance centers around protecting a business against unforeseen circumstances.