Key-person disability insurance
A) is common in small firms.
B) protects the firm from losses due to the death of a key employee.
C) replaces revenue lost when a key employee is disabled.
D) is rarely recommended by advisors to small businesses.

Question

Quizplus · Accepted Answer

Key-person disability insurance is a type of insurance that replaces revenue lost when a key employee is disabled and unable to work. It is important for small businesses to consider this type of coverage to protect against the financial impact of losing a key employee due to disability. While key-person life insurance (option B) is also commonly used in small firms, it protects against losses due to the death of a key employee, not disability. Option A is not necessarily true (key-person disability insurance may or may not be common in small firms), and option D is not accurate (advisors do recommend key-person disability insurance to small businesses).

Key-Person Disability Insurance