Best Key Person Insurance

Protect your business in case something happens to your key people

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Key person insurance is a product that provides life insurance and/or disability insurance for a "key person" in a company whose absence would have a severe financial impact on the business. While usually purchased to cover a founder, CEO, or another executive, it can be used to cover anyone whose absence would cause a significant loss in business, like a key salesperson. 

With key person insurance, the company is the beneficiary of the policy, and the benefits can be used to cover costs to temporarily or permanently hire for a position or to temporarily or permanently close the business. The best key person insurance balances the level of coverage you need with the ease of making a claim in an emergency and charges affordable premiums. This roundup aims to help readers find a key person insurance policy that is the best fit for their business.

The Best Key Person Insurance for 2022

Best Overall : Nationwide



Why We Chose It: Nationwide provides good coverage at a reasonable price while also offering companies a full suite of other business insurance options, making it possible for you to get affordable insurance coverage for all your business needs in one place.

What We Like
  • Several options for key person universal life insurance

  • Full suite of business insurance options

  • Easy to apply for a policy

What We Don’t Like
  • No combined disability insurance and life insurance options

  • Coverage options not clearly laid out on their website

Nationwide’s key person policies vary in cost, deductibles, and coverage options based on the number of key people being insured, their ages, their health situations, their locations, your business, and the coverage amounts that you choose. Because Nationwide also provides a full complement of business insurance options, you might be able to get discounts on your policy by bundling your insurance purchases.

With Nationwide, it’s simple to apply for a policy. You can find an agent close to you, apply online, or call their toll-free number between the hours of 9 a.m. and 8 p.m. ET on weekdays. Nationwide typically requires a physical before coverage for key person insurance.

Because of the type of coverage offered, you might be able to access the cash value of the life insurance if you need to cover business expenses in the future.

Widely regarded as a reputable and trusted insurer, Nationwide has an AM Best rating of A+ and is ranked as one of the top 100 companies on the Fortune 500.

Best for Small Business : Allstate



Why We Chose It: Allstate provides coverage aimed specifically at protecting small businesses against the risk of death of a key person, like a leader or a key salesperson. They also offer several other affordable business insurance options.

What We Like
  • Affordable options for business insurance

  • Offers other types of business insurance

What We Don’t Like
  • Does not offer key person disability insurance

  • Only one option for key person life insurance

  • Coverage options not clearly laid out on their website

Allstate’s key person coverage only covers the company in the event of the death of the key person, and the cost of a policy varies in policy fees, deductibles, and coverage options based on things like the number of key people being insured, their ages, their health situations, their locations, and the coverage amounts you decide on. You might be able to save money if you purchase other business insurance products from Allstate by bundling your purchases. 

It’s simple to apply for a key person life insurance policy with Allstate. You can contact an agent to get an appointment for a quote or fill out a pre-application online. The key person you are trying to cover might also be required to get a physical to qualify for their life insurance policy.

A major insurer, Allstate has been in business since 1931 and has an A+ financial strength rating from AM Best. It has good customer service ratings for claims processing, as well.

Best for Disability Coverage : Petersen International Underwriters

Peterson International Underwriters

Peterson International Underwriters

Why We Chose It: Petersen International Underwriters focus on providing key person disability insurance and offers several different disability key person coverage options that allow you to choose much larger coverage options than their competitors and they insure people up to age 75.

What We Like
  • They offer disability coverage when few insurers do.

  • They offer high coverage amounts.

  • They cover almost everyone no matter their situation.

What We Don’t Like
  • The underwriters don’t deal with the public directly, but through other insurers.

  • They likely charge a premium for their tailored coverage.

Petersen International Underwriters claim that 90% of traditional carriers do not offer key person disability insurance as part of their business insurance offerings. However, it offers significant policy options for their disability coverage including coverage up to $100,000 per month or up to a $20,000,000 lump-sum payment. They also offer coverage for people as old as 75 and in almost all occupations, allowing you to get coverage even when your key person is high risk.

Getting coverage with Petersen International Underwriters isn’t easy. While you can call them toll-free between the hours of 7 a.m. and 4 p.m. PT, Monday through Friday to ask them for a list of brokers who provide their insurance, they only sell directly to licensed insurance professionals rather than to the public. 

The complexity of the insurance they underwrite might also mean that it takes longer to get a policy.

Petersen International Underwriters are licensed in 50 states and rated A by AM Best.

Best for Term Life Coverage : Embroker



Why We Chose It: Embroker is an online insurer that will help you find several options for key person life and disability coverage to meet your specific needs, including term policies, permanent life policies, and disability policies.

What We Like
  • Affordable term life insurance option

  • Offers an easy online application

  • Customizable options including disability coverage

What We Don’t Like
  • A newer company, which presents potential risks

  • They don’t have as a long track record of claims support as competitors.

Embroker is a great option because they are one of the few insurers to offer key person term life insurance, which is often cheaper than permanent life insurance. The downside is that you don’t build cash value as you do in a permanent life insurance policy, so you can’t borrow against and take money out of your policy in the future if you need it for your business. It is also something that you purchase for a specific term of time, and you will no longer be covered once that time period expires.

The policy can be used to temporarily or permanently hire a replacement, as a protection against a partnership company closing in the event of a partner’s death, or as a guarantee for business loans.

Embroker offers both term and permanent options as well as disability options for key person insurance, but their rates vary significantly depending on the type of coverage you need, your company, and the person you’re covering. To get a quote, you fill out a form online to start the process and get a quote in as little as 10 minutes.

If you have any questions or need to report a claim, you can contact them 24/7 via phone, email, or live chat. While they are an online company, they assign you a personal account manager to work with you.

Embroker is an online insurance company that was built in order to leverage modern technology to pass savings onto insurance clients. Based in California, it was the first digital business insurance provider and was founded in 2015. Embroker has an A+ rating from AM Best in the category of financial strength and claims-paying.

Best for High-Risk Insureds : The Hartford

The Hartford

 The Hartford

Why We Chose It: The Hartford offers key person insurance that is focused on businesses with maturing leaders, making it the perfect option for high-risk key person insurance.

What We Like
  • The Hartford has been in business since 1810

  • Has good customer service reviews

What We Don’t Like
  • Premiums vary significantly depending on your business/industry

  • Their online quote system doesn’t give you key person quotes

  • Does not provide the insurance directly

Since The Hartford’s key person insurance rates vary significantly from industry to industry and depending on the person being covered, they can’t give you an average quote. They also don’t allow you to apply for a quote online for this type of insurance so you have to call them to get one. However, when it comes to key person insurance, they only offer key person life insurance and not key person disability coverage.

If you have a claim to make on your key person coverage, it’s easy to do so online or via phone. Claims can be made 24 hours a day and 365 days a year, although because this is a specialized insurance product that they don’t directly underwrite, it might take longer for them to process your claim.

The Hartford has been a trusted name in the insurance business since 1810 and is widely noted as having good customer service. They hold a financial strength rating of A+ from AM Best.

Final Verdict

The key person insurance companies that made our list are all great options, but they offer very different products. While some focus only on permanent life insurance or disability insurance, others are a full-service stop for a wide variety of insurance options, such as a full complement of other business insurance products and services. Some companies also provide the insurance directly to their customers, and others work through insurance agents or other underwriters.  

Overall, we recommend Nationwide’s permanent life insurance coverage options because it offers two options, and you can quickly and easily get your key person covered while also taking care of your other business insurance needs all in the same place.

Compare Providers

 Company  Why We Chose It  Standout Feature  AM Best Rating
Nationwide Reputable company with two good permanent life options Get all your business insurance in one place A+
Allstate Coverage for your key person with other business insurance options Get all your business insurance in one place A+
Petersen International Underwriters Disability coverage for almost all situations Up to $20,000,000 in coverage A
Embroker Offers term, permanent, and disability coverage Get a quote in 10 minutes A+
The Hartford Offers a variety of options through other underwriters Get all your business insurance in one place A+

Frequently Asked Questions

What Is Key Person Insurance?

Key person insurance is a business insurance policy that provides life or disability insurance to cover the costs and losses a company will incur if a key person at a company dies or is unable to work.

How Does Key Person Insurance Work?

A business can purchase key person insurance to protect itself from potential loss in case a key person at the company dies or becomes permanently or temporarily disabled. The business is the beneficiary of this policy and can use that money to offset the loss of income, hire a temporary or permanent replacement, buy out a partner, or permanently or temporarily close the business.

How Much Does Key Person Insurance Cost?

Key person insurance varies significantly depending on the size of your business, the industry, the age and health of the employee(s) being covered, and other factors. You will need to get a quote from an insurer to find out how much it will cost you.

Who Is Key Person Insurance for?

While most people take out key person insurance to cover the founder or leader of a company, a company can purchase key person insurance to cover any and all persons who are critical to a company’s success. This might include key consultants or salespeople at a company who bring in significant income or a leader who is critical to the company’s success.

Is Key Person Insurance Tax Deductible?

Unlike other business expenses and insurance products, the costs of a key person insurance policy are not tax-deductible as business expenses.

How Much Key Person Insurance Coverage Do I Need?

How much key person insurance a company needs will depend on each company’s particular situation and the potential losses or costs of that key person being unable to work or suddenly dying. Many companies choose a coverage amount after looking at the costs of temporarily or permanently replacing the key person, covering overhead and salary costs while that person is temporarily disabled, or winding up the business in the event of that individual’s death.


We researched all the companies that listed offering key person insurance on their websites and then narrowed our choices down. We considered the reputation of the company, the types of coverages they offered, the ease of applying for a policy, customer service, the types of other business insurance offered by the company, and the diversity of key person products they offered.

The top contenders on this list are all reputable, have years of industry experience, and offer some form of this rare and specialized business insurance coverage.

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