{"id":11319,"date":"2026-11-07T00:59:33","date_gmt":"2026-11-07T00:59:33","guid":{"rendered":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-tell-your-cpa\/"},"modified":"2026-11-07T00:59:40","modified_gmt":"2026-11-07T00:59:40","slug":"key-person-insurance-tell-your-cpa","status":"publish","type":"page","link":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-tell-your-cpa\/","title":{"rendered":"How to Tell Your CPA About Key Person Insurance"},"content":{"rendered":"\n
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Key Person Insurance | Miami, Florida<\/p>

Bring Your CPA the Facts You Need on Key Person Insurance<\/h1>

A clear checklist for sharing your business, ownership and cash-flow details, so your CPA can review the tax and cash-flow side with you. Insurance is offered by Nischay Rawal, a licensed insurance agent, separately from the accounting practice.<\/p>

Call us today<\/a><\/div>
Call us today<\/a><\/div><\/div>\n<\/div><\/div>\n\n\n\n
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Why Start the Conversation With Your CPA<\/h2>\n

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Your records in one place<\/h3>

Entity type, ownership percentages, loans and existing policies give the coverage review a complete starting point.<\/p><\/div>

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Protecting the business and the people in it<\/h3>

Key person insurance is designed to help a business plan for the financial effect of losing an owner or essential employee.<\/p><\/div>

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Tax and cash flow considered together<\/h3>

A CPA firm can look at how a policy fits your financial picture, alongside the insurance itself.<\/p><\/div>

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Coordinated with your other planning<\/h3>

Buy-sell agreements, estate planning and whole life or term coverage can be reviewed in the same conversation.<\/p><\/div><\/div>\n\n<\/div>\n\n\n

By Nischay Rawal \u00b7 Published November 6, 2026<\/p>\n\n

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Tell your CPA about key person insurance by bringing a short list of facts. Gather your entity type, your owners, your loans, the key person’s role, and any policies you already have. Your CPA can then review the tax and cash-flow side with you. The insurance itself is recommended and sold by a licensed insurance agent, separately from the accounting practice. Many owners ask how do I tell my CPA about key person insurance after they realize one person’s loss would strain the company.<\/p>\n

Why Key Person Insurance Comes Up in a CPA Meeting<\/h2>\n

Key person insurance is a life insurance policy that a business owns on someone whose work it depends on. The company applies for the policy, pays the premiums, and is the beneficiary. If that person dies, the proceeds go to the business, not the family. The Insurance Information Institute<\/a> describes this coverage as compensation for financial losses caused by the death or disability of a key employee.<\/p>\n

Owners often raise this with their CPA because the questions touch the books. Who pays the premium, how it’s recorded, and how proceeds are reported all affect accounting. Use the list below to prepare before that meeting. It focuses on facts to gather, not on what coverage costs.<\/p>\n\n

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If a key employee's loss would strain your loans or payroll, gather your facts and reach out to our team to request 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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Facts About Your Business Entity and Owners<\/h2>\n

Your entity type decides who owns the policy and how it’s taxed. A sole proprietorship, partnership, LLC, and corporation each handle ownership differently. Under federal rules, an eligible entity can elect its tax classification. An entity with at least two members can elect to be treated as an association or a partnership (26 C.F.R. \u00a7 301.7701-3<\/a>). Your CPA confirms which rule fits your company.<\/p>\n

Bring these facts to the meeting:<\/p>\n