{"id":10923,"date":"2026-11-05T02:33:17","date_gmt":"2026-11-05T02:33:17","guid":{"rendered":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-policy-transfer-when-employee-leaves\/"},"modified":"2026-11-06T08:42:03","modified_gmt":"2026-11-06T08:42:03","slug":"key-person-policy-transfer-when-employee-leaves","status":"publish","type":"page","link":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-policy-transfer-when-employee-leaves\/","title":{"rendered":"Florida Key Person Life Insurance: When an Employee Leaves"},"content":{"rendered":"\n
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Key Person Insurance | Florida<\/p>

Key Person Life Insurance: Planning for a Key Employee's Departure<\/h1>

When a valued employee leaves, a business can feel the loss. Learn how key person life insurance works, how it differs from other business coverage, and what to consider in a coverage review with NR CPAs & Business Advisors.<\/p>

Call us today<\/a><\/div>
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By Nischay Rawal \u00b7 Published November 4, 2026<\/p>\n\n

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Leaving the company does not, by itself, cancel a Florida key person life insurance policy. The business usually stays the owner unless someone changes the policy. The real decisions are whether to keep, surrender, transfer or sell it, and each choice has tax and cash flow effects. This page explains those choices in plain words.<\/p>\n

Insurance is offered by Nischay Rawal, acting as a licensed insurance agent, separately from the accounting practice of NR CPAs & Business Advisors, a Miami CPA firm.<\/p>\n

What a Key Person Policy Is and Who Holds It<\/h2>\n

The employee is the insured.<\/p>\n

The Insurance Information Institute<\/a> describes this coverage as a way to compensate a business for financial losses caused by a key employee’s death or disability.<\/p>\n

Three roles matter here: the owner, the beneficiary and the insured. In many business policies, the company holds the first two roles. When the employee leaves, those roles still need to match the contract and any buy-sell or employment agreement. For the full overview, read our key person insurance guide<\/a>.<\/p>\n\n

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If a key employee has left and the policy is still in the business's name, we can walk through your options in a coverage review. Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.<\/p>

Schedule a coverage review<\/a><\/div>
Schedule a coverage review<\/a><\/div><\/div>\n<\/div>\n\n
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What Happens to the Policy When the Employee Leaves?<\/h2>\n

Leaving the company does not change who owns the policy. Ownership changes only when the policy is transferred, surrendered or sold. Florida law says an insurable interest need not exist after coverage starts. See Fla. Stat. \u00a7 627.404<\/a>.<\/p>\n

Premiums still fall due on the policy’s schedule. The policy stays in force during that grace period. The insurer may charge interest on the late premium, not above 8 percent per year. See Fla. Stat. \u00a7 627.453<\/a>. Once that window ends unpaid, the policy can lapse.<\/p>\n

Next, pull the contract and any buy-sell or employment agreement. Look for terms on departing employees, transfers and buyouts. Those terms often shape what the business can do next.<\/p>\n

What Options Does the Policy Owner Weigh?<\/h2>\n

The owner usually weighs four paths: keep, surrender, transfer or sell. Each one affects cash flow, tax and planning in its own way.<\/p>\n