{"id":6228,"date":"2026-10-27T08:06:57","date_gmt":"2026-10-27T08:06:57","guid":{"rendered":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-owner-relocating-abroad\/"},"modified":"2026-10-29T23:31:22","modified_gmt":"2026-10-29T23:31:22","slug":"key-person-insurance-owner-relocating-abroad","status":"publish","type":"page","link":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-owner-relocating-abroad\/","title":{"rendered":"Key Person Insurance When an Owner Moves to India"},"content":{"rendered":"\n
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Key Person Insurance | Florida Businesses<\/p>

Key Person Insurance When an Owner Moves to India<\/h1>

A move abroad can raise real questions about your business and your family. NR CPAs & Business Advisors helps Florida business owners, including Indian-American owners, review key person coverage with a CPA's view of tax and cash flow. Insurance is offered through Nischay Rawal, a licensed insurance agent, separately from the accounting practice.<\/p>

Call us today to schedule a coverage review<\/a><\/div>
Call us today to schedule a coverage review<\/a><\/div><\/div>\n<\/div><\/div>\n\n\n

By Nischay Rawal \u00b7 Published October 27, 2026<\/p>\n\n

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Key person insurance<\/a> is life insurance a business buys on the life of a person whose death would affect the business, such as an owner, director, officer, partner, manager, or key employee, with that person’s written consent; the narrower officer or 20-percent-owner definition in IRC \u00a7 264(e)(1)<\/a> applies only to that section’s policy-loan interest exception. For the policy-loan interest exception in IRC \u00a7 264(e)(1)<\/a>, the statute defines ‘key person’ as an officer or 20-percent owner, but the number of individuals who may be treated as key persons with respect to any taxpayer is limited. The company owns the policy and receives the death benefit. When that owner moves to India, the policy may need a fresh look. Ownership, underwriting, premium payments, and tax treatment can all change.<\/p>\n

What Key Person Insurance Is and Why a Move Raises Questions<\/h2>\n

Key person insurance is a business’s own life insurance policy on a key owner or employee. The company pays the premiums and collects the death benefit. Many Indian-American business owners call it Keyman insurance. It is the same coverage under a different name.<\/p>\n

The purpose is simple. If a key person dies, the business may lose sales, pay to recruit a replacement, or need cash to meet its debts. The death benefit gives the company funds to cover those gaps. Under IRC \u00a7 264<\/a>, for the policy-loan interest exception in paragraph (1), a key person is an officer or 20-percent owner, subject to limits on how many individuals can count.<\/p>\n

This page is for US companies whose owner is moving to India or already lives there. It also helps family members, partners, and CFOs who want to know whether the policy still fits. Most of these policies were written while the owner lived in the United States. A move can change underwriting, servicing, and the tax picture. Those changes are easier to handle before the move date.<\/p>\n\n

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Not sure what your next step is?<\/h3>

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

What the Policy Covers and Who Holds Each Role<\/h2>\n

A key person policy has three roles: the owner, the insured, and the beneficiary. The company is usually both the owner and the beneficiary. The insured is the key person whose life is covered.<\/p>\n

A business needs an insurable interest in the person it insures, unless the benefits under the contract are payable to that person or his or her personal representatives, or to anyone who had an insurable interest in the insured when the contract was made. Florida law says a business has one in its owners, directors, officers, and key persons when written consent is obtained before the insurance is bought (Fla. Stat. \u00a7 627.404<\/a>). The business may not retaliate against a key person who refuses consent.<\/p>\n

Term life insurance covers a set period. Fla. Stat. \u00a7 627.404<\/a> reads: “(5) A contract of insurance upon a person, other than a policy of prepaid funeral contract; group life insurance; or group or blanket accident, health, or disability insurance, may not be carried out unless, on or before the time of entering into such contract, the person insured, having legal capacity to contract, applies for or consents in writing to the contract and its terms, except that any person having an insurable interest in the life of a minor younger than 15 years of age or any person upon whom a minor younger than 15 years of age is dependent for support and maintenance may obtain a policy of insurance on the minor.” Whole life insurance lasts for the insured’s life and builds cash value. The NAIC Life Insurance Buyer’s Guide<\/a> explains the difference between term and permanent coverage.<\/p>\n

Some companies also use buy-sell agreement insurance to fund a purchase when an owner leaves. Before a move, review riders, conversion rights, and premium payment terms. Review the policy and the buy-sell terms together.<\/p>\n

What Changes When the Insured Lives in India<\/h2>\n

A move to India can change three things: underwriting, insurer availability, and policy servicing. Each one can affect the offer, the premium, or the claim process.<\/p>\n