Key Person Insurance

Protect what — and who — makes your business strong

Your business depends on people, not just numbers. Key Person Insurance helps protect your company from financial loss if an owner, partner, or essential employee passes away or becomes disabled. At Cox, Klugh & Company, we help business owners prepare for the unexpected, keeping operations and ownership transitions on track. Based in Anderson, we work with companies throughout South Carolina and across the region.

What key person coverage really means

Planning ahead for the unexpected

Key Person Insurance (sometimes called “key man insurance”) is a life or disability policy that a company takes out on one of its most valuable team members. If that person passes away or becomes unable to work, the payout goes to the business — providing crucial funds to help the company recover and move forward.


This coverage acts as a financial buffer, helping your business manage lost revenue, pay off debt, or recruit and train a replacement. For closely held companies and partnerships, it’s a practical step toward long-term continuity and financial stability.


Without a plan in place, the loss of a key leader can create disruption across every part of a business. With the right protection, you can maintain operations, preserve relationships, and buy time to rebuild with confidence.

The difference between recovery and risk

Protecting revenue, credit, and continuity

The sudden loss of a key individual can impact everything from cash flow to client trust. Key Person Insurance provides liquidity when your business needs it most — helping cover immediate expenses, replace lost profits, and sustain momentum.


This coverage also strengthens your position with lenders and investors, many of whom view key person insurance as a mark of sound management. Whether you’re a small family business or a growing enterprise, planning ahead protects both your company’s value and the people who depend on it.


Our team helps integrate key person insurance into your broader continuity and succession plan, ensuring your coverage complements other strategies like buy-sell agreements and retirement planning.

Planning for people, not just numbers

A structured process that builds confidence

Assessing Your Needs

We analyze your company’s operations to determine how much coverage would offset financial loss and keep the business running smoothly. The goal is to ensure stability, not excess.

Integration with Buy-Sell Planning

Key Person Insurance often funds a buy-sell agreement, ensuring ownership transitions happen smoothly if a partner passes away. We coordinate both sides so the plans work together.

We take the time to understand your business and identify who your “key people” really are — often partners, founders, or top executives whose expertise or relationships are essential to success.

Policy Selection

Our team helps choose the right policy type, often term life insurance for cost-effective protection, or permanent insurance for long-term planning or buy-sell agreements.

Implementation and Review

We guide you through underwriting, compare multiple carriers, and revisit your coverage as your business evolves.



Key Person Insurance FAQs

Answers for business owners and partners

  • Is key man insurance just life insurance on my partner? Who receives the benefit?

    In a sense, yes — but it’s structured for the business, not personal use. The company owns the policy, pays the premiums, and receives the payout if the insured person dies or becomes disabled. Those funds can be used to maintain cash flow, hire replacements, or buy out ownership shares. The goal is to protect the business, not the individual’s family.

  • How do I know how much key person coverage to buy?

    The amount depends on your company’s size, profits, and reliance on the person being insured. We help you calculate a coverage level that reflects lost income, outstanding debt, and the cost to recruit and train a replacement. Most businesses insure for one to two years of expected profits, but we tailor each plan to your situation.

  • What type of insurance policy is used for key person coverage?

    Term life insurance is most common because it offers high coverage at an affordable cost for the years when risk is highest. For long-term needs or buy-sell agreements, a permanent life insurance policy can make sense since it builds cash value and lasts indefinitely. We’ll compare both options and recommend what best fits your business.

  • Can key person insurance premiums be deducted as a business expense?

    Typically, premiums are not tax-deductible, but the death benefit is tax-free to the company. This structure ensures that the business can use the full payout without worrying about additional taxes. We’ll coordinate with your accountant or tax advisor to confirm the best approach for your situation.

  • We’re a small business — is key person coverage really necessary?

    If losing one person would cause serious disruption, then yes. Many small companies depend heavily on one or two people for leadership, client relationships, or technical expertise. Key Person Insurance ensures your business has the resources to continue without interruption — and it’s often more affordable than owners expect.