In Key Employee Life Insurance, who typically names the beneficiary?

In Key Employee Life Insurance, the employer typically names the beneficiary. This type of insurance is designed to provide financial protection for a business in the event of the death of a key employee whose contributions are vital to the success and revenue generation of the company. Since the employer is the one who takes out the policy and pays the premiums, they also have the control over who will benefit from the policy in case the key employee passes away.

By naming themselves, or the business, as the beneficiary, the employer can ensure that the funds from the policy can be used for purposes such as replacing the key employee, covering loss of income, or facilitating a smooth transition for the company. This characteristic underscores the unique nature of Key Employee Life Insurance compared to individual life insurance policies, where the insured individual typically names the beneficiary.