Financial Stability: Provides the business with a financial cushion to deal with the loss of a key person. Continuity: Helps ensure that the business can continue operating smoothly without significant disruptions. Debt Repayment: The payout can be used to pay off any debts or loans that the key person was responsible for. Attracting Investors: Demonstrates to investors that the business has a risk management strategy in place, making it a more attractive investment.