Question

Key person insurance is intended to

a. allow a key person to purchase the business
b. help retain key employees by offering added benefits
c. give premium-grade benefits to key employees
d. cover business losses due to the death of a key employee

Answer 1

Key person insurance is intended to cover business losses due to the death of a key employee. It is a type of life insurance policy that a business takes out on a key employee to protect against financial loss in case that employee dies or becomes disabled.

Step-by-step explanation:

Key person insurance is intended to cover business losses due to the death of a key employee.

It is a type of life insurance policy that a business takes out on a key employee to protect against financial loss in case that employee dies or becomes disabled.

The insurance payout can be used to cover costs associated with finding and training a replacement, as well as any potential loss of revenue that may occur.