Glossary of Insurance Related Terms

Keogh Act (HR-10) Plan

A plan under the Self-Employed Individual's Tax Retirement Act which permits a self-employed individual to establish a formal retirement plan including himself and to obtain tax advantages similar to those available in qualified corporate pension plans. (LI)

Key Employee Insurance

(1) Insurance on the life or health of a key employee, the loss of whose services would cause an employer financial loss. The policy is owned by and payble to the employer. (2) In Health Insurance the term is also used to designate Salary Continuation Insurance or a medical benefit plan payable to the key employee himself, with the employer paying all or part of the premium. (LI,H)

Key Person (Key Employee) Insurance Policy

An insurance policy on the life of a key employee whose death would cause the employer financial loss, owned by and payable to the employer. In health insurance, the term Key Employee A&H policy is also used to designate salary continuation insurance payable to a key employee or to a medical benefits plan, payable to that employee paying all or part of the premium. (LI)

Key Person Insurance

Insurance designed to protect a business firm against the loss of income resulting from the death or disability of a key employee.

Key-person life insurance

Life insurance purchased by a business on the life of a person (usually an employee) whose continued participation in the business is necessary to the firm’s success and whose death or disability would cause financial loss to the company.