| Just as you know it is good business practice to establish depreciation reserves for machinery and equipment, so too, you recognize the necessity of accumulating funds to protect against the loss of management talent. A reserve fund is required for this purpose since no one knows exactly when it will be needed.
One of the simplest and yet most important ways for a business to use the benefits of a life insurance policy is through key employee coverage. Through this approach, life insurance covers a key employee to protect an employer from economic loss caused by that employee's death.
In addition, ownership of key employee insurance can be arranged so that banks and other creditors are assured that money will be available at the insured's death to pay the firm's debts. | 
