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ex5-3 contrasting an employee

Contrasting an employee who does not fit the profile of a key person with someone who does is the best way to help understand this concept. Assuming a highly paid employee is a key person for insurance purposes, especially when that person is employed by a large business, might seem reasonable, in reality, is not part of the process. Such a person may, indeed, be a highly paid and highly respected executive of a large business. However, if the business employs others who could step into this individual's role immediately to assume his or her responsibilities, negative economic consequences are unlikely to occur. This person is clearly valuable but is not a candidate for key person disability insurance. On the other hand, an individual with unique talents, one whose duties and revenue-generating skills are singular, is a candidate for key person disability insurance—regardless of the size of the business in which he or she works. An advertising executive who cranks out successful campaign after successful campaign, something no one else can do, is an example. Even if this individual were employed by a large firm, chances are the individual generates far more revenue than any other ad executive on the payroll does.