If Corporation Is The Owner And Beneficiary Of The Key-person Life Insurance. If The Corporation Collects The Policy Benefit Then?

If the corporation is both the owner and beneficiary of the key-person life insurance policy, it will receive the policy benefit upon the death of the insured key person. The funds can be used to cover the loss of revenue, recruit and train a replacement, or settle debts, thereby ensuring business continuity. The payout is typically received tax-free, providing a financial buffer for the corporation during a challenging transition period. It is important for the corporation to have a clear plan for utilizing these funds effectively.