Private Equity firm insures the founders and key professionals within its portfolio of companies 

Key person insurance

$45M

Key Person insurance coverage amount

PRODUCTS

OTHER CASE STUDIES

One of the most valuable assets of a venture capital or private equity investment is the talent operating the businesses they invest in. In today’s environment, it's prudent and affordable to protect and insure your investments. The private equity firm understood this and worked with TRC Financial to insure the key people inside of their portfolio companies for the risk of death and disability.
Challenge

TRC Financial was engaged to help an investment management private equity firm insure the founders and key professionals within its portfolio of companies. Unfortunately, the firm had recently experienced the tragic death of a founder from one of its largest portfolio companies. A challenge when insuring key people within portfolio companies is underwriting hurdles for life insurance and disability insurance. These challenges can be both health and financial as it relates to the individuals we are insuring and the valuation of the business.

Solution

TRC Financial worked with one of the partners at the private equity firm to implement an action plan for insuring all of the key people within each portfolio company. TRC Financial used its Private Underwriting process to protect financial and medical confidentiality for the founders and key professionals within the portfolio companies. We used term life insurance and specialty disability insurance to protect the private equity firm in the case of a death or disability. "TRC Financial proved to be an excellent partner for us. Their professional team had a clear understanding of our needs from day 1 and worked tirelessly to the get the coverage that we needed in place as quickly as possible," said Partner at the private equity firm. "In particular, TRC Financial's proprietary digital Private Underwriting was extremely helpful to protect financial and medical confidentiality for the founders and key professionals within our portfolio companies."

  • Issued life insurance and disability insurance coverage on all of the founders and key professionals
     

  • The premium cost was pennies on the dollar compared to the portfolio company investments and protection in place 
     

  • The coverage and premiums are locked in for the policy period (5 years for disability and 10 years for life insurance)

$45M in Key Person Insurance Placed

$45,000,000 of key person insurance placed on the PE firm's portfolio companies.

Provides tax-free lump sum benefits upon the disability of a key person.

Life insurance tax-free death benefit upon the death of a key person.

Insured the key people driving the private equity firm's investments.

The premiums required to properly insure the key people were nominal.

Used a 100% digital process to underwrite and issue the life and disability coverage.

The above client case study is based on the economic results for one of TRC Financial's clients. The economics associated with each individual client are unique and impacted by the insurance product acquired, the performance of the life insurance policy, timing of premium payments, medical underwriting for the insured(s), and the actual life expectancy of the insured(s). The client case study is not intended to be opinion or advice on legal, tax, accounting or investment matters. Private counsel should be consulted prior to application of this general information to specific situations.

These results are for illustrative/informational purposes only and may not reflect the typical purchaser's (client’s) experience and are not intended to represent or guarantee that anyone will achieve the same or similar results.