PA Key Person Life Insurance
By Sean Quinlan, Esq. · Updated January 15, 2025
Key person insurance is owned by the business, on the life of an owner or critical employee. Death benefit funds the buyout, transition, and revenue gap.
Pricing
Coverage typically 5–10x annual contribution to the business. Term policies are standard.
Tax treatment
Premiums are not deductible; proceeds are tax-free to the business (subject to AMT for C-corps over thresholds).
Coordination
Frame the policy with the buy-sell. A policy intended to fund a buyout should be owned in the buy-sell structure, not as general key-person coverage.
This article is general information about Pennsylvania law as of the update date above. It is not legal advice for your situation and does not create an attorney-client relationship. For advice on your specific facts, please schedule a consultation.
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