{"id":7194,"date":"2026-10-29T05:23:20","date_gmt":"2026-10-29T05:23:20","guid":{"rendered":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-premium-cash-flow-review\/"},"modified":"2026-10-29T23:35:04","modified_gmt":"2026-10-29T23:35:04","slug":"key-person-insurance-premium-cash-flow-review","status":"publish","type":"page","link":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-premium-cash-flow-review\/","title":{"rendered":"Can a Business Afford Key Person Insurance Premiums?"},"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-7192\" alt=\"A senior operations manager reviews production schedules at a workstation in a manufacturing facility, with colleagues working behind them.\" src=\"https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-at-photo-35.jpg\" width=\"1376\" height=\"768\" srcset=\"https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-at-photo-35-150x150.jpg 150w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-at-photo-35-300x167.jpg 300w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-at-photo-35-768x429.jpg 768w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-at-photo-35-1024x572.jpg 1024w, https:\/\/nrcpas.com\/life-insurance-guides\/wp-content\/uploads\/2026\/10\/a-senior-operations-manager-reviews-production-schedules-at-photo-35.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 | Miami, 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)\">Can Your Business Afford Key Person Insurance Premiums?<\/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)\">A CPA&#x27;s view of premiums, cash flow and coverage choices, from term life to whole life, for businesses across Florida and beyond.<\/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:+13058723096\">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><\/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 29, 2026<\/p>\n\n<article lang=\"en\">\n\n\n<h2>Can a business afford key person insurance premiums?<\/h2>\n<p>A business can afford key person premiums when the payment fits after payroll, debt service, reserves and planned spending are covered. Affordability is a cash flow question. It is not a judgment about whether the policy has value.<\/p>\n<p><a href=\"\/life-insurance-guides\/key-person-insurance\/\">Key person insurance<\/a> is a life insurance policy that the business owns on someone whose death or disability would cost the company money. The <a href=\"https:\/\/www.iii.org\/publication\/insuring-your-business-small-business-owners-guide-to-insurance\/specific-coverages\/life-insurance-for-key-employees\">Insurance Information Institute<\/a> explains that this coverage compensates a business for financial losses caused by the death or disability of a key employee. Because the business pays the premium, the cost must fit the budget every month or every year.<\/p>\n<p><strong>A simple cash flow test<\/strong><\/p>\n<ul>\n<li>Start with the cash left after payroll, rent, loan payments and taxes.<\/li>\n<li>Subtract the reserve you want to keep for slow months.<\/li>\n<li>Compare the premium, on the schedule you would pay it, with what remains.<\/li>\n<li>Ask how many months of shortfall the business could absorb if revenue dipped.<\/li>\n<\/ul>\n<p>If the premium uses most of what remains, the policy may strain the business. Test that before you commit.<\/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\/male-workshop-owner-repairing-metal-parts-at-workbench-with-photo.jpg\" alt=\"A man in a workshop stands beside a cluttered workbench, adjusting metal parts with hand tools.\" 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>What sets the premium<\/h2>\n<p>The insured person&#8217;s age and health, the death benefit size, the policy type and the payment schedule set most of the premium.<\/p>\n<ul>\n<li><strong>Underwriting.<\/strong> The insurer&#8217;s underwriting process decides the rating class. Health questions are required, and issue may depend on insurability.<\/li>\n<li><strong>Death benefit (face amount).<\/strong> A larger face amount raises the premium. Size it to the financial loss, not to the most the business could pay.<\/li>\n<li><strong>Term or whole life.<\/strong> Term covers a set period. Whole life is designed to last as long as the contract stays in force. The <a href=\"https:\/\/content.naic.org\/sites\/default\/files\/publication-lig-lp-consumer-life.pdf\">NAIC Life Insurance Buyer&#8217;s Guide<\/a> explains the differences between term and permanent coverage.<\/li>\n<li><strong>Payment mode.<\/strong> Annual, semi-annual, quarterly or monthly payments change the total you pay in a year.<\/li>\n<li><strong>Changes over time.<\/strong> Term premiums can change at renewal or at age-based points. The contract states whether and when.<\/li>\n<\/ul>\n<p>Read the premium next to the limitations, exclusions, renewability and cancellability. A low early premium tells only part of the story. Whole life cash values show guaranteed and non-guaranteed amounts separately, so read both.<\/p>\n<h2>Building premiums into the business cash flow plan<\/h2>\n<p>Whether a business can afford key person insurance premiums depends on how the payment fits your calendar. Put the premium in the operating budget on the same schedule as your other bills. Accrue it monthly so no single payment hits all at once.<\/p>\n<ul>\n<li><strong>Match timing to revenue.<\/strong> Plan larger payments around quarterly tax dates and slow months.<\/li>\n<li><strong>Use term for a defined need.<\/strong> Term can fit while a key person is central to a loan or growth plan with a clear end date.<\/li>\n<li><strong>Plan whole life across years.<\/strong> Whole life is a longer commitment. Stopping payment can end coverage or change the values, so model that before you start.<\/li>\n<li><strong>Know the grace period.<\/strong> Florida law requires a grace period of at least 30 days for any premium after the first, and the policy stays in force during it. The insurer may charge interest of up to 8 percent per year for that period (<a href=\"https:\/\/www.leg.state.fl.us\/statutes\/index.cfm?App_mode=Display_Statute&amp;URL=0600-0699\/0627\/Sections\/0627.453.html\">Fla. Stat. \u00a7 627.453<\/a>).<\/li>\n<li><strong>Keep dividends out of the budget.<\/strong> Dividends, where a policy pays them, are not guaranteed. Do not count them as cash.<\/li>\n<li><strong>Run a stress test.<\/strong> Ask how the business would pay premiums during a revenue dip, and what happens if a payment is missed.<\/li>\n<\/ul>\n<h2>How premium payments are treated for tax purposes<\/h2>\n<p>Federal law generally denies a deduction for life insurance premiums when the taxpayer is a beneficiary. For a key person policy the business owns, the premium is usually an after-tax cost (<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/264\">IRC \u00a7 264<\/a>).<\/p>\n<ul>\n<li><strong>Death benefits.<\/strong> The exclusion of death benefits from gross income is described in the <a href=\"https:\/\/www.irs.gov\/faqs\/interest-dividends-other-types-of-income\/life-insurance-disability-insurance-proceeds\">IRS life insurance proceeds FAQ<\/a>, not in <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/264\">IRC \u00a7 264<\/a>. <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/264\">IRC \u00a7 264<\/a> says no deduction is allowed for premiums on any life insurance policy, or endowment or annuity contract, if the taxpayer is directly or indirectly a beneficiary under the policy or contract. For an employer-owned life insurance contract, such as many key person policies, that exclusion is limited to the premiums and other amounts the policyholder paid, unless the written notice-and-consent requirements of <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/101\">IRC \u00a7 101(j)<\/a> are met before the policy is issued and an exception applies. Interest paid on proceeds left with the insurer is taxable (<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/101\">26 U.S.C. \u00a7 101<\/a>).<\/li>\n<li><strong>Employer-owned rules.<\/strong> Under <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/6039I\">26 U.S.C. \u00a7 6039I<\/a>, a policyholder owning employer-owned life contracts issued after the date of the enactment of this section must file a return for each year the contracts are owned.<\/li>\n<li><strong>Ownership and beneficiary.<\/strong> Transferring an existing policy to a new owner can change the tax result under the transfer-for-value rule in <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/101\">26 U.S.C. \u00a7 101<\/a>.<\/li>\n<li><strong>The facts decide.<\/strong> The tax result depends on the entity type, ownership and policy terms. Our team reviews those facts in the coverage review, next to the cash flow test.<\/li>\n<\/ul>\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>Matching coverage size to what the business can carry<\/h2>\n<p>Size the death benefit to the financial loss the business would face, then test whether the premium fits. Starting from the loss keeps the policy tied to the actual risk.<\/p>\n<p>Estimate the loss using these items:<\/p>\n<ul>\n<li>Lost profit during the gap while the business recovers.<\/li>\n<li>The cost of hiring and training a replacement.<\/li>\n<li>Loan terms that depend on the key person.<\/li>\n<li>Revenue tied to one customer or to one person&#8217;s relationships.<\/li>\n<\/ul>\n<p>Then compare options. Show the premium for each face amount and each term. If the full amount does not fit the cash test, a lower face amount or shorter term may still address the largest exposure.<\/p>\n<p>Florida rules also apply. Under <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>, a business entity has an insurable interest in the life, body, and health of its owners, directors, officers, partners, managers, and key employees or key persons (as defined in <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/101\">IRC \u00a7 101(j)<\/a>), if consent is obtained in writing from the key employees or persons before the insurance is purchased. The business may not retaliate against a key person who refuses consent.<\/p>\n<p>Review the coverage on a schedule. Revenue, debt and the key person&#8217;s role change over time.<\/p>\n<h2>What a coverage review involves and why NR CPAs &amp; Business Advisors<\/h2>\n<p>A coverage review is the first meeting, where we gather the numbers and test whether the premium fits. The review follows these steps:<\/p>\n<ol>\n<li>Gather financial statements, loan terms and a description of the key person&#8217;s role.<\/li>\n<li>Define the financial exposure from losing that person.<\/li>\n<li>Run the cash flow test with payroll, debt and reserves.<\/li>\n<li>Compare term and whole life at the face amounts under consideration.<\/li>\n<li>Review the illustration, limitations, exclusions, renewability and cancellability.<\/li>\n<\/ol>\n<p>The timeline depends on your documents and on the insurer&#8217;s underwriting process. The insurer, not the firm, makes underwriting decisions.<\/p>\n<p>NR CPAs &amp; Business Advisors is a Miami CPA firm. We help families, professionals and business owners across the United States, including Indian-American households and business owners, with life insurance and a CPA&#8217;s view of tax and cash flow. Insurance is offered by Nischay Rawal, a licensed insurance agent, separately from the firm&#8217;s accounting practice. Our support staff help with scheduling and documents.<\/p>\n<h2>Frequently asked questions about key person premiums<\/h2><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Are key person premiums tax deductible?<\/summary><p class=\"wp-block-paragraph\">Generally not when the taxpayer is a beneficiary, under <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/264\">IRC \u00a7 264<\/a>. Your tax result depends on the facts of your business.<\/p><\/details><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Can a business afford key person insurance premiums if cash is tight?<\/summary><p class=\"wp-block-paragraph\">Compare term with whole life, adjust the face amount, or review the timing of payments. A smaller plan may still address the largest loss.<\/p><\/details><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Who pays the premium?<\/summary><p class=\"wp-block-paragraph\">Usually the business that owns the policy pays it. We confirm ownership and the payer during the coverage review.<\/p><\/details><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Are whole life dividends guaranteed?<\/summary><p class=\"wp-block-paragraph\">No. Dividends are not guaranteed, so keep them out of your cash budget.<\/p><\/details><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>Does the policy require a health exam?<\/summary><p class=\"wp-block-paragraph\">Health questions are required, and issue may depend on insurability.<\/p><\/details><details class=\"wp-block-details chg-faq is-layout-flow wp-block-details-is-layout-flow\"><summary>How long does a coverage review take?<\/summary><p class=\"wp-block-paragraph\">It depends on your documents and the insurer&#8217;s underwriting process.<\/p><\/details>\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\/three-men-work-together-at-a-workshop-table-with-a-laptop-an-photo.jpg\" alt=\"Three men work together at a workshop table with a laptop and crafting materials.\" 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\">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>Talk through your premium numbers with us<\/h2>\n<p>If a key person premium has just landed on your desk, that is the moment to run the numbers. Protecting the people your business depends on starts with a clear cash picture. Please <a href=\"https:\/\/nrcpas.com\/contact\">contact our team<\/a> to set up a coverage review with Nischay Rawal.<\/p>\n\n<\/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<h2 class=\"wp-block-heading has-text-align-center\">How we look at the premium<\/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--check\"><\/span><\/p><h3 class=\"wp-block-heading\">Cash flow first<\/h3><p class=\"wp-block-paragraph\">We look at what the business pays each month or year and how the premium fits into its existing obligations.<\/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--document\"><\/span><\/p><h3 class=\"wp-block-heading\">Policy type<\/h3><p class=\"wp-block-paragraph\">Term and whole life policies carry different premium structures, and we explain the differences in plain terms before you decide.<\/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\">Face amount<\/h3><p class=\"wp-block-paragraph\">The amount of coverage can be sized to the role the insured person plays in the business, which can change the premium.<\/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--shield\"><\/span><\/p><h3 class=\"wp-block-heading\">Tax context<\/h3><p class=\"wp-block-paragraph\">As a CPA firm, we review how premiums and the policy may interact with your business&#x27;s tax position, based on your facts.<\/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\">Insurance is offered separately<\/h3><p class=\"wp-block-paragraph\">Insurance is offered through Nischay Rawal, a licensed insurance agent, separately from the firm&#x27;s accounting practice. Premiums depend on factors such as age, health answers and the policy chosen, and issue may depend on insurability. Ask us for a full explanation before you buy.<\/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\">Call us today<\/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<\/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\">Ways to make premiums fit your budget<\/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\">Compare term and whole life<\/h3><p class=\"wp-block-paragraph\">Term coverage and whole life insurance serve different needs. Comparing them side by side shows which structure suits your cash flow.<\/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\">Adjust the face amount<\/h3><p class=\"wp-block-paragraph\">A smaller face amount can lower the premium while still addressing the most important losses the business would face.<\/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\">Review payment timing<\/h3><p class=\"wp-block-paragraph\">Discussing how and when premiums are paid can help the business plan for them alongside other commitments.<\/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\">Link to a buy-sell plan<\/h3><p class=\"wp-block-paragraph\">If an ownership agreement is in place, we can review how key person and buy-sell coverage work together.<\/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<\/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:+13058723096\">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<!-- 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-insurance-premiums-from-foreign-account\/\">Can a Business Pay Key Person Insurance Premiums From a Foreign Bank Account?<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-insurance-proceeds-cover-payroll\/\">How Key Person Insurance Proceeds Can Keep Payroll Running After an Owner Dies<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-insurance-professional-practice\/\">Key Person Insurance for Professional Practices: Doctors, Lawyers, Accountants<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-insurance-professional-practices-and-partnerships\/\">Key Person Life Insurance for Professional Practices and Partnerships<\/a><\/li><li><a href=\"\/life-insurance-guides\/key-person-insurance\/key-person-insurance-real-estate-brokerage\/\">Key Person Insurance for a Real Estate Brokerage: Covering the Broker Who Holds the Listings<\/a><\/li><\/ul>\n<\/nav>\n<!-- \/chg:section-siblings -->","protected":false},"excerpt":{"rendered":"<p>Can your business afford key person insurance premiums? See the cash flow test, what sets the cost, and how federal tax rules shape the real outflow.<\/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-insurance-premium-cash-flow-review\/\"}, {\"hreflang\": \"es\", \"href\": \"https:\/\/nrcpas.com\/life-insurance-guides\/es\/seguro-persona-clave\/revision-flujo-caja-primas-seguro-clave\/\"}, {\"hreflang\": \"x-default\", \"href\": \"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-premium-cash-flow-review\/\"}]","chg_jsonld":"[{\"@context\": \"https:\/\/schema.org\", \"speakable\": {\"@type\": \"SpeakableSpecification\", \"cssSelector\": [\"article > p:first-of-type\", \".wp-block-details p\", \"article > h1\"]}, \"about\": [{\"@type\": \"Thing\", \"name\": \"Life insurance\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Life_insurance\"}, {\"@type\": \"Thing\", \"name\": \"Term life insurance\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Term_life_insurance\"}], \"mentions\": [{\"@type\": \"Thing\", \"name\": \"Whole life insurance\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Whole_life_insurance\"}, {\"@type\": \"Thing\", \"name\": \"Key person insurance\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Key_person_insurance\"}, {\"@type\": \"Thing\", \"name\": \"Cash value\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Cash_value\"}, {\"@type\": \"Thing\", \"name\": \"Annuity\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Annuity\"}, {\"@type\": \"Thing\", \"name\": \"Underwriting\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Underwriting\"}, {\"@type\": \"Thing\", \"name\": \"Insurance policy\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Insurance_policy\"}, {\"@type\": \"Thing\", \"name\": \"Beneficiary\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Beneficiary\"}, {\"@type\": \"Thing\", \"name\": \"Certified Public Accountant\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Certified_Public_Accountant\"}, {\"@type\": \"Thing\", \"name\": \"Insurance broker\", \"sameAs\": \"https:\/\/en.wikipedia.org\/wiki\/Insurance_broker\"}], \"author\": {\"@type\": \"Person\", \"name\": \"Nischay Rawal\", \"url\": \"https:\/\/nrcpas.com\/author\", \"jobTitle\": \"Managing Partner, CPA, EA and Licensed Life Insurance Agent\", \"sameAs\": [\"https:\/\/licenseesearch.fldfs.com\/Licensee\/2306161\", \"https:\/\/www.myfloridalicense.com\/portalsearches\/VerifyLicensee\/LicenseDetail?ID=D6E76E58125054CFA98C8D92AF9DBC44\", \"https:\/\/www.taxbuzz.com\/florida\/miami\/nr-cpas-and-business-advisors-llc\", \"https:\/\/x.com\/nrawal786\", \"https:\/\/www.linkedin.com\/in\/nischay-rawal-cpa-ea-22741924a\/?isSelfProfile=false\"], \"worksFor\": {\"@type\": \"Organization\", \"@id\": \"https:\/\/nrcpas.com\/life-insurance-guides\/#organization\", \"name\": \"NR CPAs & Business Advisors\", \"url\": \"https:\/\/nrcpas.com\/\"}}, \"publisher\": {\"@type\": \"Organization\", \"@id\": \"https:\/\/nrcpas.com\/life-insurance-guides\/#organization\", \"name\": \"NR CPAs & Business Advisors\", \"url\": \"https:\/\/nrcpas.com\/\"}, \"reviewedBy\": {\"@type\": \"Person\", \"name\": \"Erika Trinidad\", \"jobTitle\": \"Accountant\", \"worksFor\": {\"@type\": \"Organization\", \"@id\": \"https:\/\/nrcpas.com\/life-insurance-guides\/#organization\", \"name\": \"NR CPAs & Business Advisors\", \"url\": \"https:\/\/nrcpas.com\/\"}}, \"inLanguage\": \"en\", \"mainEntity\": [{\"@type\": \"Question\", \"name\": \"Are key person premiums tax deductible?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"Generally not when the taxpayer is a beneficiary, under IRC \u00a7 264. 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