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Insurance & Protection · Business Insurance
Key Person Insurance Calculator
Short answer: What does the Key Person Insurance Calculator calculate?
The Key Person Insurance Calculator works out suggested additional coverage, Multiple-of-Compensation method and Contribution-to-Profits method. Estimate how much life insurance a business should carry on an owner or employee it depends on, using three common methods. It uses US rules and USD, and it is free to use on this page.
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See the coverage that would protect the business — results update as you type.
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Estimates only — not a loan offer or financial advice. Switch theme and light/dark above to see how it could look on your site.
Put this calculator on your websiteWhat this calculator does
What the Key Person Insurance calculator works out
The Key Person Insurance Calculator is a free, embeddable calculator from CalcFunnel. Estimate how much life insurance a business should carry on an owner or employee it depends on, using three common methods.
You enter 8 inputs: annual salary & benefits, compensation multiple, annual profit they generate, years to recover, recruiting & training cost, profit lost during transition, business debts they guarantee and existing key person coverage.
It returns suggested additional coverage, Multiple-of-Compensation method, Contribution-to-Profits method, replacement-cost method and method used.
Built for insurance agents and benefits advisors. Embedding it on your own website needs the Business plan (from $210/month, with a 14-day free trial), which unlocks the Insurance & Protection category.
Results it shows
- 01Suggested Additional Coverage
- 02Multiple-of-Compensation Method
- 03Contribution-to-Profits Method
- 04Replacement-Cost Method
- 05Method Used
The first figure — suggested additional coverage — is the headline result.
Inputs
What you can change
Every field visitors can adjust, straight from the calculator, with the same help text they see on the info icon. Each one starts with a sensible default, and the 5 results update as they type.
The Key Person
- Annual Salary & Benefits
- The key person's total yearly compensation, including bonuses and benefits.
- Compensation Multiple
- A rule-of-thumb multiple of compensation. Insurers often allow up to 5 to 10 times; the default is only a starting point.
- Annual Profit They Generate
- The share of yearly profit that comes from this person's work, relationships or skills.
- Years to Recover
- How long the lost profit would last before a replacement is fully productive.
Cost of Losing Them
- Recruiting & Training Cost
- Search fees, signing bonus, higher salary and training to bring in a replacement.
- Profit Lost During Transition
- Lost clients, delayed projects and other profit lost while the role is vacant.
- Business Debts They Guarantee
- Loans or credit lines the person personally guarantees, which a lender may call on their death.
- Existing Key Person Coverage
- Life insurance the business already owns on this person.
Definitions
Key Person Insurance terms, defined
The terms this calculator uses, in plain words. The same definitions appear inside the calculator for your visitors.
- Key person insuranceSeguro de persona clave
- Life (and sometimes disability) insurance a business buys on an owner or employee whose loss would seriously hurt it. The business owns the policy, pays the premiums and is the beneficiary, and uses the payout to cover lost profit, recruit a replacement or reassure lenders and clients.Un seguro de vida (y a veces de discapacidad) que un negocio compra sobre un dueño o empleado cuya pérdida lo afectaría gravemente. El negocio es dueño de la póliza, paga las primas y es el beneficiario, y usa el pago para cubrir las ganancias perdidas, reclutar un reemplazo o dar tranquilidad a prestamistas y clientes.
- Multiple-of-compensation methodMétodo del múltiplo de la compensación
- Coverage equal to a multiple of the person's total compensation, often 5 to 10 times. It is simple and is the way many insurers frame their underwriting limits, but it does not measure the person's actual effect on profit.Una cobertura igual a un múltiplo de la compensación total de la persona, a menudo de 5 a 10 veces. Es sencillo y es la forma en que muchas aseguradoras plantean sus límites de evaluación, pero no mide el efecto real de la persona en las ganancias.
- Contribution-to-profits methodMétodo de contribución a las ganancias
- The yearly profit attributable to the person times the years it would take the business to recover. $120,000 a year for three years suggests $360,000 of coverage.La ganancia anual atribuible a la persona multiplicada por los años que el negocio tardaría en recuperarse. $120,000 al año durante tres años sugieren $360,000 de cobertura.
- Replacement-cost methodMétodo del costo de reemplazo
- The cost of finding and training a successor, plus profit lost during the transition and any business debts the person guarantees that a lender might call. It focuses on the immediate cash the business would need.El costo de encontrar y capacitar a un sucesor, más la ganancia perdida durante la transición y cualquier deuda del negocio garantizada por la persona que un prestamista podría exigir. Se centra en el efectivo inmediato que necesitaría el negocio.
- Notice and consent (IRC 101(j))Aviso y consentimiento (IRC 101(j))
- For employer-owned life insurance, the employee must be told in writing and consent before the policy is issued, and the business must file Form 8925 each year. Without this, part of the death benefit can become taxable to the business.En el seguro de vida que posee el empleador, el empleado debe ser informado por escrito y dar su consentimiento antes de que se emita la póliza, y el negocio debe presentar el Formulario 8925 cada año. Sin esto, parte del beneficio por fallecimiento puede quedar gravada para el negocio.
- Tax treatmentTratamiento fiscal
- Premiums for key person life insurance are generally not tax-deductible when the business is the beneficiary, and a properly documented death benefit is generally received income-tax-free. Confirm the details with a tax adviser.Las primas del seguro de vida de persona clave en general no son deducibles de impuestos cuando el negocio es el beneficiario, y un beneficio por fallecimiento bien documentado en general se recibe libre de impuesto sobre la renta. Confirme los detalles con un asesor fiscal.
Inline, without an iframe
Paste the snippet where the Key Person Insurance Calculator should appear. It renders into your page, fills the width of its container and grows to fit.
Best for: Landing pages, blog posts, calculator pages
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Popup button
A button sits on your page; one click opens the calculator in a popup over it.
Best for: Pricing sections, hero areas, listings
Floating corner widget
Paste once (or in your site-wide footer code) for a floating bubble in the corner of every page.
Best for: Site-wide, always one click away
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Your own link or button
Give any existing link, button or image a class and it opens the calculator when clicked.
Best for: Menus, images, in-text links
- Try the calculator →
Direct link
A full-page link to the calculator for emails, social posts, QR codes or a menu item.
Best for: Email, social, print, QR codes
Floating launcher
A bubble in the corner of every page opens a menu of your calculators.
6 ready-made designs
Tabs
Calculators side by side in one block on the page, switched with tabs.
6 ready-made designs
Buttons
A row of buttons; each one opens its calculator in a popup.
6 ready-made designs
Cards grid
A grid of cards with an icon and a short blurb; click to open the calculator.
6 ready-made designs
FAQ
Key Person Insurance calculator FAQs
Still stuck? Ask the team — we reply within one business day.
Q.01What does the Key Person Insurance Calculator calculate?
Estimate how much life insurance a business should carry on an owner or employee it depends on, using three common methods. It returns suggested additional coverage, Multiple-of-Compensation method, Contribution-to-Profits method, replacement-cost method and method used.
Q.02What information do I need to use the Key Person Insurance Calculator?
You enter 8 inputs: annual salary & benefits, compensation multiple, annual profit they generate, years to recover, recruiting & training cost, profit lost during transition, business debts they guarantee and existing key person coverage. Every input starts with a sensible default, so you can change only what you know.
Q.03What does “Annual Salary & Benefits” mean in the Key Person Insurance Calculator?
The key person's total yearly compensation, including bonuses and benefits.
Q.04What does “Compensation Multiple” mean in the Key Person Insurance Calculator?
A rule-of-thumb multiple of compensation. Insurers often allow up to 5 to 10 times; the default is only a starting point.
Q.05Is the Key Person Insurance Calculator free to use?
Yes — you can use it on this page for free, without an account. Embedding it on your own website needs the Business plan (from $210/month, with a 14-day free trial), which unlocks the Insurance & Protection category. Compare plans.
Q.06Can I embed the Key Person Insurance Calculator on my website?
Yes. Embed it inline, as a popup button, as a floating corner widget, from your own link or button, or share a direct link. It works on WordPress, Wix, Squarespace, Webflow, Shopify, GoHighLevel and plain HTML sites with one line of code — see embedding.
Q.07Can I change how the Key Person Insurance Calculator looks?
Yes. Choose from 12 themes, each in light and dark, then set your own brand colors and font. Ledger, Minimal, Compact come with every plan; the others unlock on Pro and Business.
Q.08Is the Key Person Insurance Calculator available in other languages?
Yes. It works in English, Spanish, Simplified Chinese, Korean, Vietnamese and Arabic, with a right-to-left layout in Arabic. Labels, tooltips, results and definitions are translated, visitors can switch language inside the calculator, and amounts stay in US dollars and US number format.
Q.09Can the calculator capture leads?
Yes. It can end with a lead form, a Get a Quote form, a Share panel or a button to any URL. Leads are saved with the inputs and results attached and can be forwarded to your CRM by webhook.
Q.10Are the Key Person Insurance results financial advice?
No. Estimates only. Shows three common rule-of-thumb methods using the figures you enter; insurers apply their own financial underwriting limits, and the amount they will issue may differ. Premiums are not estimated. Key person policies owned by an employer have tax and notice-and-consent requirements (IRC 101(j)). Consult a licensed insurance professional and a tax adviser.
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