Which statement regarding a Key Employee Life policy is NOT true?

In a Key Employee Life policy, the primary function is to protect the business against the financial impact of losing a crucial employee. The policy is indeed owned by the business, meaning that the company is responsible for paying the premiums and making decisions about the policy. The beneficiary, designated in these types of policies, is usually the business itself rather than the key employee. This is because if the key employee were to pass away, the business would need funds to locate and train a replacement, cover lost revenue, or manage other financial burdens that could arise.

Moreover, the coverage amount for a Key Employee Life policy is typically higher than personal life insurance policies. This is because it is tailored to offset the financial loss that the business might incur from the loss of a key employee. Overall, these policies serve a distinct purpose in ensuring financial stability for businesses during critical transitions.