What is the primary purpose of Key Employee Insurance?

The primary purpose of Key Employee Insurance is to pay a benefit to the business when a key employee is disabled. This type of insurance is designed to protect the financial interests of the business by providing funds that can help offset the loss of income and facilitate the costs associated with finding a replacement or covering the duties of the disabled key employee. The loss of a key individual can have a significant impact on a business's operations and profitability, so having this insurance in place helps ensure business continuity during a challenging time.

While other options may relate to different aspects of employee or retirement benefits, they do not capture the fundamental intention behind Key Employee Insurance, which focuses specifically on the economic impact of a key employee's absence due to disability or death.