Ask HN: Key Man Insurance for Startups?

[Firmwarrior]

Hey, I've been plotting to throw off the cruel yoke of salaried employment for a while now. Just a couple months before I was going to put in my notice and sneak off, though, I had a mild heart attack.

I can't leave my wife, kid, and business partner high and dry if something happens to me, but getting key man insurance seems like it's going to be vastly more difficult now.

Do any of you have recommendations for how to shop for it? I'm sure I'm not the first business owner to spend too many Sundays praying beneath the Golden Arches and pay the price for it.

(Sorry to submit this as its own post, but I've been digging pretty hard and not coming up with much..)

[philomath_mn]

I really don't think you owe anything to your business partner when you pass. Your family is what you should be worried about.

Pay off any non-mortgage debt, build a healthy 6 month emergency fund, and get a term life insurance policy for 10x your current salary -- then you should feel pretty good when you go to sleep at night.

[toomuchtodo]

philomath_mn2’s term life recommendation is good, although 10x salary might not be enough. In my early 30s, I bought a $1M 20 year term life policy from pacific life through policy genius for $48/month. I’ve since increased the policy to $2M at a reasonable cost. Better to have too much than not enough imho.

Any competent biz insurance broker should be able to get you several quotes for key person insurance. With the recent cardiac event, you’ll pay a few thousand dollars a year for it. Could always get a separate term life policy with the business as the beneficiary if it’s a challenge to write the key person policy.

Good luck!

[Firmwarrior → toomuchtodo]

Thanks! That doesn't sound too bad at all

[thy77]

Hi firmwarrior. I do keyman insurance. Www.paynefamilyfinancial.com fill out the contact form. Glad to help.