{"id":3897,"date":"2026-10-21T05:35:27","date_gmt":"2026-10-21T05:35:27","guid":{"rendered":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-premium-payer-bookkeeping\/"},"modified":"2026-10-30T00:44:42","modified_gmt":"2026-10-30T00:44:42","slug":"key-person-premium-payer-bookkeeping","status":"publish","type":"page","link":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-premium-payer-bookkeeping\/","title":{"rendered":"Who Pays Key Person Insurance Premiums? Books and Tax"},"content":{"rendered":"\n<div class=\"wp-block-cover alignfull is-dark chg-hero\" style=\"min-height:460px;aspect-ratio:unset;\"><span aria-hidden=\"true\" class=\"wp-block-cover__background has-background-dim-60 has-background-dim wp-block-cover__gradient-background has-background-gradient\" style=\"background:linear-gradient(90deg,rgba(32,36,46,1) 0%,rgba(32,36,46,1) 55%,rgba(32,36,46,0.7) 100%)\"><\/span><img class=\"wp-block-cover__image-background wp-image-3894\" alt=\"Operations manager reviewing production schedules and equipment logs at a workstation in a busy manufacturing facility.\" src=\"https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/operations-manager-reviewing-production-schedules-and-equipm-photo.jpg\" width=\"1376\" height=\"768\" srcset=\"https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/operations-manager-reviewing-production-schedules-and-equipm-photo-150x150.jpg 150w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/operations-manager-reviewing-production-schedules-and-equipm-photo-300x167.jpg 300w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/operations-manager-reviewing-production-schedules-and-equipm-photo-768x429.jpg 768w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/operations-manager-reviewing-production-schedules-and-equipm-photo-1024x572.jpg 1024w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/operations-manager-reviewing-production-schedules-and-equipm-photo.jpg 1376w\" sizes=\"(max-width: 825px) 825px, 100vw\" fetchpriority=\"high\" decoding=\"async\"\/><div class=\"wp-block-cover__inner-container has-global-padding is-layout-constrained wp-block-cover-is-layout-constrained\">\n<p class=\"chg-eyebrow has-base-color has-text-color wp-block-paragraph\" style=\"text-shadow:0 1px 3px rgba(0,0,0,0.6),0 0 18px rgba(0,0,0,0.35)\">Key Person Insurance | Florida<\/p><h1 class=\"wp-block-heading has-base-color has-text-color\" style=\"text-shadow:0 1px 3px rgba(0,0,0,0.6),0 0 18px rgba(0,0,0,0.35)\">Who Pays Key Person Insurance Premiums? Books and Tax<\/h1><p class=\"has-base-color has-text-color wp-block-paragraph\" style=\"font-size:clamp(0.875rem, 0.875rem + ((1vw - 0.2rem) * 0.625), 1.25rem);text-shadow:0 1px 3px rgba(0,0,0,0.6),0 0 18px rgba(0,0,0,0.35)\">Who owns the policy and who receives the benefit shapes how premiums are recorded in the books and reported for tax. Here is how a CPA looks at it.<\/p><div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+19542316613\">Call us today for a coverage review<\/a><\/div><div class=\"wp-block-button chg-cta chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Call us today for a coverage review<\/a><\/div><\/div>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:0.85rem;color:#6b7280;margin-bottom:1.5rem\">By Nischay Rawal \u00b7 Published October 21, 2026<\/p>\n\n<article lang=\"en\">\n\n\n<p>Usually, the business pays the premium on a key person policy. The company owns the policy, pays the premium, and receives the death benefit. That setup is common, but it isn&#8217;t the only one.<\/p>\n<h2>What Key Person Insurance Is and Why the Premium Question Matters<\/h2>\n<p><a href=\"\/life-insurance-guides\/key-person-insurance\/\">Key person insurance<\/a> is life insurance a business owns on someone whose death would hurt the company. That person is often a founder, an officer, or a top producer the business depends on.<\/p>\n<p>Every policy involves three roles:<\/p>\n<ul>\n<li><strong>Policy owner:<\/strong> the person or entity that controls the policy.<\/li>\n<li><strong>Premium payer:<\/strong> the person or entity that pays each premium.<\/li>\n<li><strong>Beneficiary:<\/strong> the person or entity that receives the death benefit.<\/li>\n<\/ul>\n<p>These roles can sit with different parties. Each mismatch changes the books and the tax reporting.<\/p>\n<p>Florida law sets a condition on the business side. A business can insure a key person only if that person consents in writing before the policy is bought. <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.404.html\">Fla. Stat. \u00a7 627.404<\/a> also bars the business from punishing a key person who says no. Under federal law, death benefits generally are not gross income. <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/101\">26 U.S.C. \u00a7 101(a)<\/a> states that general rule.<\/p>\n\n<figure class=\"wp-block-image size-large has-custom-border\"><img decoding=\"async\" src=\"https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/hand-writing-on-a-tax-form-beside-a-calculator-on-a-white-su-photo.jpg\" alt=\"Hand writing on a tax form beside a calculator on a white surface.\" style=\"border-radius:8px;width:100%;aspect-ratio:16\/9;object-fit:cover\"\/><\/figure>\n\n<div class=\"cta-dose-mid wp-block-group has-base-color has-accent-background-color has-text-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-32197852 wp-block-group-is-layout-constrained\" style=\"background-color:var(--wp--preset--color--accent,#20242e);color:var(--wp--preset--color--base,#ffffff);border-radius:8px;padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem;border-left:6px solid var(--wp--preset--color--cta,currentColor);box-shadow:0 2px 10px rgba(0,0,0,0.18)\">\n<h3 class=\"wp-block-heading has-base-color has-text-color\">Not sure what your next step is?<\/h3><p class=\"wp-block-paragraph\">Talk it through with our team &#8212; we can walk you through how a situation like yours is usually handled and what your options are.<\/p><div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+13058723096\">Schedule a coverage review<\/a><\/div><div class=\"wp-block-button chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Schedule a coverage review<\/a><\/div><\/div>\n<\/div>\n<h2>Option One: The Company Pays the Premium<\/h2>\n<p>When the company owns the policy, pays the premium, and is the beneficiary, the premium is a company cost. The bookkeeper records each payment based on the policy type.<\/p>\n<p>Term life insurance covers a set period and builds no cash value. Most bookkeepers record term premiums as an expense in the period paid.<\/p>\n<p>Permanent coverage, such as whole life insurance, works differently. Part of each premium builds cash value. That cash value is an asset on the balance sheet, not an expense. The insurer&#8217;s annual statement shows how much value has built up, and the books should match it.<\/p>\n<p>Two policies with the same yearly premium can produce different entries. One may go entirely to expense, while the other is split between expense and an asset. The exact entries depend on the facts, including the policy&#8217;s design and how the company tracks it.<\/p>\n<h2>Tax Treatment of Company-Paid Premiums<\/h2>\n<p>In most company-owned key person cases, the company cannot deduct the premium. Federal law disallows a deduction for life policy premiums when the taxpayer is directly or indirectly a beneficiary. <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/264\">IRC \u00a7 264(a)(1)<\/a> sets out that rule.<\/p>\n<p>Many owners misunderstand this point. A premium that isn&#8217;t deductible still has to be recorded correctly. Keep that amount separate from ordinary business expenses so the return matches the ledger.<\/p>\n<p>Federal reporting can add a second layer. For certain employer-owned life insurance contracts, the policyholder must file a return. That return shows the number of employees, how many are insured, the total coverage in force, the policyholder&#8217;s name, address, taxpayer identification number, and type of business, and whether each insured employee has valid consent (or how many do not). The policyholder must also keep the records needed to show whether the requirements of this reporting rule and IRC \u00a7 101(j), including valid consent, are met. <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/6039I\">IRC \u00a7 6039I<\/a> sets out those duties.<\/p>\n<p>The same premium can look different on the books and on the tax return. Track both views from the first payment. Rebuilding them at tax time is harder and more error-prone.<\/p>\n<h2>Option Two: The Owner Pays the Premium Personally<\/h2>\n<p>When the owner pays the premium from personal funds, the premium stays off the company&#8217;s books. The company should not record that payment as its own expense. Doing so mixes personal money with business money.<\/p>\n<p>A common variation is the company paying first and repaying the owner later. Each flow needs a paper trail. Keep a written agreement or a board or shareholder resolution. Keep the bank record for every payment.<\/p>\n<p>Repayments can carry different reporting. A payment may be treated as compensation, a shareholder contribution, or a loan from the owner. Each treatment has its own reporting rules. Settle the category before the first payment, not after the return is filed.<\/p>\n<p>Ownership matters too. If the owner holds the policy personally, the owner controls it and names the beneficiary. Those choices should match what the company intends.<\/p>\n\n<div class=\"cta-dose-mid wp-block-group has-base-color has-accent-background-color has-text-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-32197852 wp-block-group-is-layout-constrained\" style=\"background-color:var(--wp--preset--color--accent,#20242e);color:var(--wp--preset--color--base,#ffffff);border-radius:8px;padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem;border-left:6px solid var(--wp--preset--color--cta,currentColor);box-shadow:0 2px 10px rgba(0,0,0,0.18)\">\n<h3 class=\"wp-block-heading has-base-color has-text-color\">Have questions about what happened?<\/h3><p class=\"wp-block-paragraph\">Ask our team directly. Tell us what you are dealing with and we will explain how the process works from here.<\/p><div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+13058723096\">Talk to our team<\/a><\/div><div class=\"wp-block-button chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Talk to our team<\/a><\/div><\/div>\n<\/div>\n<h2>Cash Surrender Value, Policy Loans, and Year-End Reporting<\/h2>\n<p>Cash surrender value is the amount a permanent policy would pay if the policyholder ended it. The insurer&#8217;s annual statement shows this figure. The year-end entry should match it.<\/p>\n<p>Keep guaranteed and non-guaranteed values separate. Guaranteed values are stated in the policy. Non-guaranteed figures, including projections, are not guaranteed. A dividend, where a policy pays one, is not guaranteed either. Books and summaries should say so.<\/p>\n<p>Policy loans change the picture. The loan is limited to the policy&#8217;s loan value. <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.458.html\">Fla. Stat. \u00a7 627.458<\/a> sets out those rules. A loan lowers the net value the company can claim, so track the loan balance and any interest each year.<\/p>\n<p>Watch the notice rule too. If total debt on the policy equals or exceeds the loan value, the policy may end. The insurer must mail at least 30 days&#8217; notice first. That loan provision does not apply to term policies.<\/p>\n<h2>Building a Clean Bookkeeping File for the Policy<\/h2>\n<p>A clean file answers three questions: who paid, for what, and where it was recorded. Start with these documents:<\/p>\n<ul>\n<li>the policy form and the application<\/li>\n<li>the beneficiary designation<\/li>\n<li>board or shareholder approvals<\/li>\n<li>the key person&#8217;s signed written consent<\/li>\n<li>each premium invoice and proof of payment<\/li>\n<\/ul>\n<p>Keep the signed consent on file. Florida requires it before the policy is bought, so a missing form is a real gap. <a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.404.html\">Fla. Stat. \u00a7 627.404<\/a> sets that requirement for individual policies: the insured must apply for or consent in writing on or before the time the contract is entered. Prepaid funeral contracts, group life, and group or blanket accident, health, or disability policies are excluded.<\/p>\n<p>Next, build a premium ledger. Each line should show the date, the amount, who paid, which account received the entry, and any reimbursement. Name the policy owner and the beneficiary on every line. The file should make sense without the paper policy in hand.<\/p>\n<p>Before the year closes, compare the ledger with the insurer&#8217;s statements. Mismatches are easier to fix in the same year than years later.<\/p>\n<h2>What Changes If the Key Employee Leaves or the Business Is Sold<\/h2>\n<p>A departure or a sale can change who owns the policy and who should pay the next premium. Plan these changes before they happen.<\/p>\n<p>If a key employee leaves, the company may keep the policy, cancel it, or transfer it. The key employee departure guide covers those options in more detail.<\/p>\n<p>Transfers have their own consequences. Federal law limits the tax exclusion when a life policy is transferred for valuable consideration. <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/101\">IRC \u00a7 101<\/a> sets that limit. The company sale ownership guide explains the ownership side.<\/p>\n<p>Buy-sell arrangements are reviewed separately. They can use life insurance to fund a buy-out. Plan the policy and the agreement together, and before any transfer.<\/p>\n\n<figure class=\"wp-block-image size-large has-custom-border\"><img decoding=\"async\" src=\"https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/euro-banknotes-a-calculator-and-a-laptop-keyboard-arranged-o-photo.jpg\" alt=\"Euro banknotes, a calculator, and a laptop keyboard arranged on a desk for business accounting.\" style=\"border-radius:8px;width:100%;aspect-ratio:16\/9;object-fit:cover\"\/><\/figure>\n<h2>Schedule a Coverage Review to Settle Who Pays<\/h2>\n<p>If you&#8217;re setting up a key person policy or sorting out old premium entries, start with a coverage review. Owners who paid premiums without a clear record of whose money paid them can find the books hard to untangle. A bookkeeper asked to record a new policy faces the same question.<\/p>\n<p><a href=\"https:\/\/nrcpas.com\/contact\">Contact NR CPAs &amp; Business Advisors<\/a> to schedule a coverage review of the policy, the ownership setup, and the bookkeeping plan.<\/p>\n<p>Insurance is offered by Nischay Rawal, a licensed insurance agent in Florida. Insurance is offered separately from the firm&#8217;s accounting practice.<\/p>\n<h3>Frequently Asked Questions<\/h3><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Who pays the key person insurance premium?<\/summary><p class=\"wp-block-paragraph\">Usually the business does, because it owns the policy and is the beneficiary. Other setups are possible, and each one changes the books.<\/p><\/details><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Is key person insurance premium tax deductible?<\/summary><p class=\"wp-block-paragraph\">Generally not when the company is the beneficiary. <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/264\">IRC \u00a7 264(a)(1)<\/a> disallows that deduction.<\/p><\/details><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Is the key person death benefit taxable?<\/summary><p class=\"wp-block-paragraph\">Generally not as income to the beneficiary. <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/101\">26 U.S.C. \u00a7 101(a)<\/a> sets the general rule.<\/p><\/details><\/article>\n<footer class=\"disclaimer\"><em>NR CPAs &amp; Business Advisors, LLC, 782 NW 42nd Avenue, Suite 534, Miami, FL 33126. Life insurance is offered by Nischay Rawal, a Florida-licensed life and health insurance agent (license G066337). This page is general information about life insurance, not tax, legal or investment advice, and not an offer of any specific policy. Coverage, premiums and benefits depend on the issuing insurer&#x27;s underwriting and the policy&#x27;s terms. Policy loans and withdrawals reduce cash value and the death benefit and may have tax consequences.<\/em><\/footer>\n\n\n<div class=\"wp-block-group alignwide has-global-padding is-layout-constrained wp-container-core-group-is-layout-583d630a wp-block-group-is-layout-constrained\" style=\"padding-top:3rem;padding-bottom:3rem;padding-left:1.5rem;padding-right:1.5rem\">\n\n<div class=\"cta-dose-mid wp-block-group has-base-color has-accent-background-color has-text-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-32197852 wp-block-group-is-layout-constrained\" style=\"background-color:var(--wp--preset--color--accent,#20242e);color:var(--wp--preset--color--base,#ffffff);border-radius:8px;padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem;border-left:6px solid var(--wp--preset--color--cta,currentColor);box-shadow:0 2px 10px rgba(0,0,0,0.18)\">\n<h3 class=\"wp-block-heading has-base-color has-text-color\">Want to know where you stand?<\/h3><p class=\"wp-block-paragraph\">Tell us about your situation and our team will walk you through the options available to you.<\/p><div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+13058723096\">Request a coverage review<\/a><\/div><div class=\"wp-block-button chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Request a coverage review<\/a><\/div><\/div>\n<\/div>\n<h2 class=\"wp-block-heading has-text-align-center\">How we approach key person insurance<\/h2>\n<div class=\"wp-block-columns alignwide is-layout-flex wp-container-core-columns-is-layout-f56f613f wp-block-columns-is-layout-flex\"><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><p class=\"wp-block-paragraph\"><span class=\"chg-icon chg-icon--document\"><\/span><\/p><h3 class=\"wp-block-heading\">Ownership first<\/h3><p class=\"wp-block-paragraph\">We start by confirming who owns the policy, who pays the premium and who is named as beneficiary, because each setup leads to different bookkeeping.<\/p><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><p class=\"wp-block-paragraph\"><span class=\"chg-icon chg-icon--lightbulb\"><\/span><\/p><h3 class=\"wp-block-heading\">Books and tax together<\/h3><p class=\"wp-block-paragraph\">Our CPA view connects the insurance decision to the business&#x27;s ledger, cash flow and tax reporting, so the numbers match the plan.<\/p><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><p class=\"wp-block-paragraph\"><span class=\"chg-icon chg-icon--users\"><\/span><\/p><h3 class=\"wp-block-heading\">Owners and families<\/h3><p class=\"wp-block-paragraph\">We work with business owners, professionals and families, including Indian-American households and NRI clients with ties to the United States.<\/p><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><p class=\"wp-block-paragraph\"><span class=\"chg-icon chg-icon--location\"><\/span><\/p><h3 class=\"wp-block-heading\">Florida focus<\/h3><p class=\"wp-block-paragraph\">We serve clients in Miami, Fort Lauderdale, West Palm Beach, Orlando, Tampa and Jacksonville, with contact available across the United States.<\/p><\/div><\/div>\n\n<\/div>\n\n\n\n<div class=\"wp-block-group has-base-color has-accent-background-color has-text-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-32197852 wp-block-group-is-layout-constrained\" style=\"background-color:var(--wp--preset--color--accent,#20242e);color:var(--wp--preset--color--base,#ffffff);border-radius:8px;padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem;border-left:6px solid var(--wp--preset--color--cta,currentColor);box-shadow:0 2px 10px rgba(0,0,0,0.18)\">\n<h3 class=\"wp-block-heading has-base-color has-text-color\">Check the setup before the first premium is paid<\/h3><p class=\"wp-block-paragraph\">Ownership and beneficiary choices can change how a premium is recorded and reported. Review the policy structure with your CPA and your insurance agent before the policy is issued or the first payment is made.<\/p><div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+19542316613\">Call us today for a coverage review<\/a><\/div><div class=\"wp-block-button chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Call us today for a coverage review<\/a><\/div><\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull has-surface-background-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-583d630a wp-block-group-is-layout-constrained\" style=\"padding-top:3rem;padding-bottom:3rem;padding-left:1.5rem;padding-right:1.5rem\">\n<h2 class=\"wp-block-heading has-text-align-center\">Questions to bring to your coverage review<\/h2>\n<div class=\"wp-block-columns alignwide is-layout-flex wp-container-core-columns-is-layout-f56f613f wp-block-columns-is-layout-flex\"><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><div class=\"wp-block-group has-base-background-color has-background is-layout-flow wp-block-group-is-layout-flow\" style=\"border-radius:8px;box-shadow:0 4px 14px rgba(0,0,0,0.08);padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem\"><h3 class=\"wp-block-heading\">Who owns the policy?<\/h3><p class=\"wp-block-paragraph\">Ownership determines who controls the policy and how its value appears on the balance sheet.<\/p><\/div><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><div class=\"wp-block-group has-base-background-color has-background is-layout-flow wp-block-group-is-layout-flow\" style=\"border-radius:8px;box-shadow:0 4px 14px rgba(0,0,0,0.08);padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem\"><h3 class=\"wp-block-heading\">Who pays the premium?<\/h3><p class=\"wp-block-paragraph\">The company, an owner or another party may pay. Each choice affects cash flow and the books.<\/p><\/div><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><div class=\"wp-block-group has-base-background-color has-background is-layout-flow wp-block-group-is-layout-flow\" style=\"border-radius:8px;box-shadow:0 4px 14px rgba(0,0,0,0.08);padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem\"><h3 class=\"wp-block-heading\">Who is the beneficiary?<\/h3><p class=\"wp-block-paragraph\">The beneficiary named in the policy affects both the purpose of the coverage and how payments are reported.<\/p><\/div><\/div><div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><div class=\"wp-block-group has-base-background-color has-background is-layout-flow wp-block-group-is-layout-flow\" style=\"border-radius:8px;box-shadow:0 4px 14px rgba(0,0,0,0.08);padding-top:1.5rem;padding-bottom:1.5rem;padding-left:1.5rem;padding-right:1.5rem\"><h3 class=\"wp-block-heading\">How is it recorded?<\/h3><p class=\"wp-block-paragraph\">We review how premiums and policy values are entered in your accounts so your financial statements stay accurate.<\/p><\/div><\/div><\/div>\n\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull has-base-color has-primary-background-color has-text-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-4d466591 wp-block-group-is-layout-constrained\" style=\"background-color:var(--wp--preset--color--primary,#20242e);color:var(--wp--preset--color--base,#ffffff);padding-top:3rem;padding-bottom:3rem;padding-left:1.5rem;padding-right:1.5rem\">\n<h2 class=\"wp-block-heading has-text-align-center has-base-color has-text-color\">Protect your loved ones and your business with a clear plan<\/h2>\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-0aa01211 wp-block-buttons-is-layout-flex\"><div class=\"wp-block-button chg-cta chg-cta-call\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+19542316613\">Call us today<\/a><\/div><div class=\"wp-block-button chg-cta chg-cta-form\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/nrcpas.com\/contact\">Call us today<\/a><\/div><\/div>\n<\/div>\n\n<h2 class=\"wp-block-heading\">Related practice areas<\/h2><ul class=\"wp-block-list\"><li><a href=\"\/life-insurance-guides\/key-person-insurance\/florida\/\">Key Person Insurance in Florida<\/a><\/li><\/ul>\n<!-- chg:section-siblings -->\n<nav aria-label=\"More in this section\">\n<h2>More in this section<\/h2>\n<ul><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-term-life-insurance\/\">Key Person Term Life Insurance: Affordable Protection for Your Business<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-whole-life-insurance\/\">Key Person Insurance with Whole Life: Build Cash Value While Protecting Your Business<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-whole-life-modified-endowment-contract\/\">Is a Key Person Whole Life Policy a Modified Endowment Contract? What Business Owners Need to Know<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/life-insurance-pay-loan-balance\/\">Life Insurance Pay Loan Balance<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/nri-owner-key-person-insurance-family-in-india\/\">Can an NRI Owner Use Key Person Insurance to Protect Family Back in India?<\/a><\/li><\/ul>\n<\/nav>\n<!-- \/chg:section-siblings -->","protected":false},"excerpt":{"rendered":"<p>Learn who pays the key person insurance premium and how each choice changes the books and tax reporting. Schedule a coverage review with NR CPAs.<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":16,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"chg_review":"","chg_sendback":"","chg_canonical":"","chg_lang":"","chg_hreflang":"[{\"hreflang\": \"en\", \"href\": \"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-premium-payer-bookkeeping\/\"}, {\"hreflang\": \"es\", \"href\": \"https:\/\/nrcpas.com\/life-insurance-guides\/es\/seguro-persona-clave\/contabilidad-primas-persona-clave\/\"}, {\"hreflang\": \"x-default\", \"href\": \"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-premium-payer-bookkeeping\/\"}]","chg_jsonld":"[{\"about\": [{\"name\": \"Key person insurance\", \"@type\": \"Thing\"}, {\"name\": \"Key man life insurance\", \"@type\": \"Thing\"}, {\"name\": \"Life insurance premium accounting\", \"@type\": \"Thing\"}, {\"name\": \"Cash surrender value\", \"@type\": \"Thing\"}], \"author\": {\"@type\": \"Organization\", \"@id\": \"https:\/\/nrcpas.com\/life-insurance-guides\/#organization\", \"name\": \"NR CPAs & Business Advisors\", \"url\": \"https:\/\/nrcpas.com\/\"}, \"@context\": \"https:\/\/schema.org\", \"audience\": {\"@type\": \"Audience\", \"audienceType\": \"Business owners and bookkeepers, including Indian-American owners of Florida companies\"}, \"headline\": \"Who Pays Key Person Insurance Premiums? 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