In the realm of big business and high finance, the term “rainmaker” holds substantial clout, influence and respect. Defined as “a person who generates income for a business or organization by brokering deals or attracting clients or funds”, a rainmaker is a key employee or business owner, usually a go-getter who is mainly responsible for a firm’s incoming new business and retention of major accounts.
In today’s digital world of networking, social media influencing and global business development, the pivotal role of rainmaker has become an art form that prospering companies rely heavily upon. No longer is traditional marketing, advertising and word-of-mouth referral enough to earn, manage and retain primary business accounts.
That being substantiated and widely accepted among most industries especially law, medicine and finance, the physical loss of an asset like a rainmaker, their expertise and connections, can prove disastrous to a firm. The loss not only affects the profitability of a firm, but also productivity, customer relations, employee morale and in general the overall business effectiveness and efficiency. Insurance becomes essential in the preservation of such an important presence in a company, providing a fiduciary safeguard in case of the tragic loss of a key person.
Life insurance is an obvious option and is often the first choice of company management, but as important, if not more, is disability insurance. Statistics dictate that a key employee is at least three times more likely to become disabled during a career than perish. Financial indemnification of the unexpected loss of key personnel to disablement must be paramount. The solution is Key Person Disability Insurance, providing protection against the loss of cash flow and the usual increase in operation costs associated with the short or long-term disablement of a key employee.
Key person DI benefits may be used at the discretion of the employer or management. The most common applications of benefits are the covering of expenses of a recruiter to find a temporary or permanent replacement, to reimburse losses due to reduced productivity of failing or failed accounts, to provide travel expenses for new account managers who attempt to keep clients on the books and to supplement overtime payments for the existing staff covering any additional workload.
Benefit platforms offer various payment options and structures including regularly-scheduled monthly benefits after a short waiting period and/or large lump-sum cash payouts after a longer wait. The benefit amounts themselves are typically calculated on a basis of a multiple of income of the prospective insured person, yet larger high-limit benefits are possible, subject to suitable financial justification.
Although it is difficult, to effectively put an accurate dollar amount on the value of such an influential figure, key person disability insurance is the best tool to provide a generous and appropriate cash flow to a firm reeling from the loss of critical personnel.