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Key Person Insurance in New York

New York requires an adult insured’s written consent before an individual employer-owned key person policy is made, and the employer must have a lawful, substantial economic interest in that person’s continued life. New York separately allows employer-owned group coverage under a special route that requires notice of the maximum face amount and employer beneficiary, plus written consent; employee-benefit-plan coverage has additional opt-out and benefit-cost conditions. 1,2

What Is Key Person?

Key person insurance pays the business, not the person’s family, when a founder, partner or employee it relies on dies. Disability, overhead expense and buyout funding are separate products to discuss on their own. Read the national Key person guide.

What to Watch for in New York

  • Get the Insured’s Written Consent

    New York requires the insured’s application or written consent for an individual life policy on another competent adult, subject to statutory exceptions such as group life and specified family cases. For an individual key person policy, keep the signed consent with the application before the contract is made. 1

  • Show a Benefit from Continued Life

    New York defines an insurable interest for a business as a lawful and substantial economic interest in the person’s continued life, health, or safety, distinct from an interest that arises or grows from the person’s death. Document the specific business relationship and expected loss rather than relying on the employee’s title alone. 1

  • Read the Group Notice Before Coverage Starts

    For group employer-owned key person coverage, New York permits exceptions from certain ordinary group-life requirements only if the insured receives advance written notice stating the maximum face amount and that the employer or policyholder will receive the benefit, and the insured consents in writing. Ask for the exact notice and compare it with the issued policy. 1,2

  • Keep Benefit-Plan Coverage in Its Own Lane

    New York’s separate employee-benefit-plan route requires notice and consent with a right to discontinue coverage, and limits total coverage to plan-benefit costs already incurred plus projected future costs. The amount and selection of insured employees must also use nondiscriminatory factors tied to plan participation; do not use this route as a shortcut for selected key people. 1

  • Track Plan Changes and Insurer Replacements

    Under New York’s benefit-plan provision, employment termination or a later end or reduction of the financed plan can trigger notice of the insured’s right to stop coverage; replacing the insurer also requires notice to each insured. If the policy funds a plan, assign an owner to track these events. 1

Who Regulates Insurance in New York

New York State Department of Financial Services

New York DFS supervises insurance companies and producers, administers insurance law and accepts consumer complaints about property and casualty policies, including commercial insurance. 3,4,5,6

Surplus-lines tax and stamping office

Reported tax rate: 3.6% of gross premium, less returned premium; ELANY stamping fee is 0.15% through 2026 and 0.17% for policies incepting on/after Jan. 1, 2027 When New York is the insured’s home state, excess-line tax is 3.6% of gross premium less returned premium. ELANY’s September 20, 2026 bulletin sets a 0.15% stamping fee through December 31, 2026 and 0.17% for policies incepting on or after January 1, 2027; statutory search requirements and guaranty-fund protection depend on the applicable New York excess-line rules. 7,8,9,10

Excess Line Association of New York

Providers With Documented State Licenses

These providers publish a national listing for Key person; the state records document licenses for the entities and roles shown below. Some records rely on company-reported information rather than independent regulator verification. A national listing does not confirm the product is available in New York. Check the regulator’s license lookup and confirm state availability for your business when requesting a quote.

  • VouchVouch Specialty Insurance Services, LLCInsurance producer, Surplus-lines broker · checked 2026-09-28Vouch’s licenses page, effective January 16, 2025, lists producer licenses in all 50 states and DC. Its separate surplus-lines table includes Idaho number 870820, while a footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses. Because those statements conflict for Idaho, this record keeps Idaho producer-only and does not treat the table number as established agency surplus-lines authority. The page is company-reported and does not establish product availability. 16

Questions to Ask Before You Buy in New York

  1. Is this an individual key person policy or group coverage, and which New York Insurance Law provision supports the employer’s interest?
  2. What facts show a lawful, substantial economic interest in this person’s continued life rather than an interest in the death benefit?
  3. For group coverage, does the written notice state the maximum face amount and identify the employer or policyholder as beneficiary before coverage starts?
  4. If proceeds will fund an employee-benefit plan, how will the policy meet the cost, nondiscrimination, opt-out, and continuing-notice conditions?

Key Person in New York: FAQ

Does a New York employee have to consent to key person life insurance? 1

Yes, for an individual employer-owned policy the insured must apply or consent in writing before the contract is made. Group-life and specified family exceptions are separate statutory cases. 1

What interest does a New York company need to insure a key person? 1

A lawful and substantial economic interest in the person’s continued life, health, or safety, distinct from an interest that arises or grows from the person’s death. Document the specific relationship and expected business effect. 1

What must a New York group key person notice tell the employee? 2

Before coverage starts, the written notice must state the maximum face amount for which the employee could be insured and that the employer or policyholder will receive death proceeds; the employee must also consent in writing. 2

Is New York benefit-plan life insurance the same as key person insurance? 1

No. The section 3205(d) benefit-plan route has opt-out and continuing notice rights, limits total coverage to qualifying plan-benefit costs, and requires nondiscriminatory selection; individual key person coverage rests on the employer’s interest in the insured. 1

Key Person in Other States

Other Coverage in New York

Sources

  1. New York Insurance Law § 3205, Insurable Interest; Consent Required; Exceptions. New York State Senate, Open Legislation; § 3205(a)–(e); current revision shown as of 2023-07-14. Accessed 2026-09-28.
  2. New York Insurance Law § 4216, Group Life Insurance; Requirements. New York State Senate, Open Legislation; § 4216(a)(1), (b)(1), (i)(1)–(2); current revision shown as of 2019-01-11. Accessed 2026-09-28.
  3. New York State Department of Financial Services. New York State Department of Financial Services; Official regulator homepage. Accessed 2026-09-28.
  4. Who We Supervise. New York State Department of Financial Services; DFS describes insurance oversight and provides links to company and producer searches. Accessed 2026-09-28.
  5. Consumer Complaints. New York State Department of Financial Services; Official portal files insurance complaints for health, life and property/casualty insurance. Accessed 2026-09-28.
  6. New York Insurance Law §2118(d)(1). New York State Senate; Current statutory text: 3.6% of gross premiums less returned premium when New York is the insured’s home state. Accessed 2026-09-28.
  7. ELANY Bulletin 2026-20: Notice of Change in Stamping Fee. Excess Line Association of New York; September 20, 2026 bulletin: 0.17% applies to policies incepting from Jan. 1, 2027; endorsements on policies incepting Jan. 1, 2023–Dec. 31, 2026 retain 0.15%; excess-line tax remains 3.6%. Accessed 2026-09-28.
  8. New York Insurance Law §2118. New York State Senate; Excess-line broker duties and filing requirements; §2118(a) due care; exceptions should be applied only where statutory conditions are met. Accessed 2026-09-28.
  9. New York Insurance Law §2118. New York State Senate; Excess-line statutory duties and policies; source is used for placement context. No state-specific guaranty cap/note included. Accessed 2026-09-28.
  10. Licenses. At-Bay; Current producer introduction and state table; At-Bay Insurance Services LLC; P&C and surplus-lines identifiers. Accessed 2026-09-21.
  11. Licenses and Carriers. Coalition; Licenses and Carriers, re-read 22 September 2026: Insurance Licenses table for Coalition Insurance Solutions, Inc., national producer number 18419475, with producer and surplus-lines numbers for all 50 states and DC including California 0L76155, Georgia 196479, Texas 2199630 and 2205589, Pennsylvania 815731 and 817452, Colorado 539028 and Wisconsin 3000108852. Insurance Carriers table naming, with NAIC numbers, Allianz Underwriters Insurance Company 36420, Arch Specialty Insurance Company 21199, Ascot Specialty Insurance Company 45055, Ascot Insurance Company 23752, Aspen Specialty Insurance Company 10717, Chaucer Insurance Company DAC, Coalition Insurance Company 29530, Fireman's Fund Indemnity Corporation 11380, Fortegra Specialty Insurance Company 16823, Lloyd's of London, MSIG Specialty Insurance USA Inc. 34886, MS Transverse Specialty Insurance Company 41807, Steadfast Insurance Company 26387, Vantage Risk Specialty Insurance Company 16275 and Zurich American Insurance Company 16535. Accessed 2026-09-22.
  12. Insurance Producer Licenses. Corgi Insurance; Current complete Insurance Producer Licenses table for Corgi Insurance Services, Inc.; 50 rows covering 49 states and DC (DC 3003091619); no New Mexico row; no NPN or as-of date shown. Accessed 2026-09-28.
  13. About Hiscox US Insurance. Hiscox; Hiscox Insurance Company Inc. NAIC 10200 as Chicago, IL domiciled insurer admitted or licensed in all 50 states and D.C.; Hiscox Inc. as general agent and Lloyd’s coverholder for Syndicates 33 and 3624; surplus-lines placements through licensed surplus-lines brokers; A.M. Best rating statement. Accessed 2026-09-16.
  14. Insurance Licenses by State. TechInsurance; Current state table; identifies TechInsurance as a division of Specialty Program Group LLC d/b/a SPG Insurance Solutions; lists DC 3000041536 and labels Rhode Island “Individual licenses,” without an agency license number. Accessed 2026-09-28.
  15. Licenses. Vouch; Effective 16 January 2025: Vouch Specialty Insurance Services, LLC, NPN 19926463; P&C table (50 states and DC); surplus-lines table includes Idaho 870820; footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses; Idaho retained as producer-only due to conflict. Accessed 2026-09-15.

Updated .

This guide is informational and does not determine whether a policy is available or meets your needs. Editorial policy. To suggest a correction, contact Spot with a supporting source.

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