{"id":7156,"date":"2026-10-29T03:12:40","date_gmt":"2026-10-29T03:12:40","guid":{"rendered":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/how-key-person-premiums-are-recorded-in-books\/"},"modified":"2026-10-31T05:47:57","modified_gmt":"2026-10-31T05:47:57","slug":"how-key-person-premiums-are-recorded-in-books","status":"publish","type":"page","link":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/how-key-person-premiums-are-recorded-in-books\/","title":{"rendered":"Key Person Insurance Premiums in the Books: Florida Guide"},"content":{"rendered":"\n
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Key Person Insurance | Florida<\/p>

Key Person Insurance Premiums: What Florida Business Owners Should Know<\/h1>

A CPA's view of how key person insurance premiums are recorded on the books, from our Miami office. Nischay Rawal, a licensed insurance agent, can walk you through your options in a coverage review.<\/p>

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By Nischay Rawal \u00b7 Published October 28, 2026<\/p>\n\n

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Key person insurance premiums are recorded in the books based on two facts: who owns the policy and who is the beneficiary. Whether the policy is term or permanent then decides how each payment is split. Term premiums usually go to expense in the period they cover. Permanent premiums can be split between expense and a cash value asset.<\/p>\n

Key person insurance is life insurance a business buys on an owner or key employee. According to the Insurance Information Institute<\/a>, it compensates a business for financial losses caused by a key employee’s death or disability.<\/p>\n

This guide walks through each case in plain words. It’s written for business owners, bookkeepers, and controllers. NR CPAs & Business Advisors is a Miami CPA firm. The bookkeeping points here are general, and your CPA should confirm the treatment for your specific policy.<\/p>\n

Why Ownership and Beneficiary Decide the Entry<\/h2>\n

The owner and the beneficiary decide where a premium goes in the books. A policy the company owns and names itself to receive is handled differently from a policy an individual owns.<\/p>\n

When the company owns the policy, pays the premium, and collects the death benefit, the premium is a company cost. The company’s books carry it. When an individual owns the policy and pays from personal funds, the premium usually stays off the company’s books.<\/p>\n

Four terms come up often:<\/p>\n