Part of our guide: Disability Income Insurance: Solutions, Tools and Guides →
In investment management, clients often invest because of one person. When that person is also CEO, president, and chief investment officer, a serious disability could threaten the entire firm. Here’s how one firm protected against that risk.
Key takeaways
- Key person disability insurance pays the business if a critical person can’t work.
- This firm’s CEO was central to performance at a fund that grew from $3.5 billion to $17 billion.
- A $50 million lump-sum policy, payable after 12 months of disability, funded succession and wind-down planning.
$50 million, paid to the company in a lump sum after 12 months if the CEO can’t perform his duties.
The client
A Southern California asset management and investment firm with a $17 billion portfolio. Its CEO also served as president, chief investment officer, and market strategist, and oversaw all U.S. equity and hedge fund strategies. Assets under management had grown from $3.5 billion to $17 billion in ten years.
The risk
Investors choose funds largely on performance attributed to the manager. If the CEO became seriously disabled, the firm would need cash to retrain staff and, if the disability were permanent, manage an orderly wind-down. The board also required an accelerated divestiture clause allowing investors to withdraw faster if the manager became incapacitated.
The solution
We designed a $50 million key person disability policy, paid to the company in a lump sum after 12 months if the CEO couldn’t perform his duties. The firm then built a broader succession plan and sought coverage for four additional sub-managers identified as critical.
For advisors
The annual premium on this case exceeded $200,000 plus taxes and fees. Most key person disability placements are smaller, often $2 million to $10 million, and are usually cross-sold with key person life insurance. See how business owners protect their business with key person DI.
Frequently asked questions
What is key person disability insurance?
Coverage owned by and payable to a business if a key employee or owner becomes disabled and can’t work.
How much key person disability coverage can a business buy?
It depends on the person’s value to the business. Large specialty placements can reach tens of millions of dollars.
Is key person disability paid as a lump sum?
It can be. Many policies pay a lump sum or monthly benefit after a set elimination period, such as 12 months.
Reviewed by Tim Fuller on 2026-09-25
Tim Fuller
President, SRS Inc.
Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency), connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners.
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