Coverage Estimator
How Much Key Person Insurance Does Your Business Need?
Answer four questions about your business and we'll show you a suggested coverage range using the same methods lenders and underwriters use.
Tell Us About Your Business
Leave any fields blank that don't apply to your situation.
Total balance of business loans where this key person's life is material to repayment — BDC, bank lines, term loans.
How much revenue would the business lose annually if this person died tomorrow? Include their direct sales, client relationships, and work they personally produce.
Recruiter fees, sign-on bonus, training time, and productivity loss during the transition. Often 1–2 years of salary for senior roles.
If there is a buy-sell agreement (or should be), what is the estimated value of the key person's ownership stake? Leave blank if sole ownership.
How These Methods Work
The Loan Coverage Method
If a key person's death would impair your ability to repay a business loan, most lenders will require coverage equal to the outstanding balance. This is the most common reason businesses first encounter key person insurance.
Read the full article →The Revenue Contribution Method
The most common valuation approach. You identify what the key person personally contributes to revenue, then multiply by 5–10× to cover the transition period and lost business. Senior sales roles often use 10×; operational roles 5×.
Read the full article →The Replacement Cost Method
Covers the hard cost of replacing the key person: executive search fees (often 25–30% of salary), sign-on bonus, onboarding, and the reduced productivity during the 12–18 months it takes for a new hire to reach full effectiveness.
Read the full article →Buy-Sell Funding
When a business has multiple owners, the death of one triggers a need to buy out their estate. Without insurance, the surviving owner may face a forced sale or an unwanted new business partner (the deceased's family). Life insurance is the cleanest funding mechanism.
Read the full article →