Ask the Expert: Banking, sponsored by Hancock Whitney

 Keith LeBlanc
Director Investment Services
Hancock Whitney
With more than 28 years of experience at Hancock Whitney Bank, Keith brings a deep sense of loyalty, leadership, and purpose to his role in the investment services industry. His career has been built on a commitment to doing what’s best for the client—always prioritizing integrity, transparency, and long-term financial well-being.

As Director of Investment Services, Keith is dedicated to supporting his advisors both professionally and personally. He works tirelessly to ensure they have the tools, training, and resources needed to provide comprehensive financial planning and exceptional client service. Keith’s leadership philosophy centers on collaboration, continuous development, and empowering his team to reach their full potential—ultimately helping clients achieve their financial goals and dreams.

How does “Keyman insurance” affect the company’s valuation in a transaction or financing?

Keyman insurance positively affects a company’s valuation and overall risk profile by mitigating the financial risk and instability that could arise from the loss of a critical individual. It provides a safety net that assures investors or buyers the business can continue operations and meet obligations during a transition period. This financial protection can reduce perceived risk, improve creditworthiness, and enhance investor confidence.

How do premiums and potential payouts influence EBITDA, cash flow, and debt covenants?

Premiums for key person insurance are typically treated as a non-deductible expense. Death benefits are normally received income tax-free, creating free cash flow. Key person insurance is often included as a debt covenant. By implementing this covenant, lenders reduce their risk when financing.

How do investors or acquirers typically view Keyman insurance during due diligence?

Investors or acquirers typically view key person insurance as evidence of risk management, protection for business continuity and as a means of assessing dependency on one or two individuals. As a result, it may strengthen investor confidence and smooth negotiations related to valuation and post-acquisition integration.

Who is considered a “key person” in the eyes of investors or acquirers, and how is that risk quantified?

A key person is any individual whose loss would materially harm the business due to their unique skills, relationships, institutional knowledge, or ability to generate revenue. This may include founders, top executives, or key sales and technical personnel.

How is the policy structured and who should be the beneficiary — the company, the shareholders, or a trust?

In most cases, the company is both the policy owner and the beneficiary, since it directly bears the financial loss if a key person dies or becomes disabled. This structure ensures that the proceeds are available to stabilize operations, pay off debt, or fund the recruitment and training of a replacement

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This information is general in nature and is not intended to be legal, tax, or financial advice. Consult an appropriate professional concerning your specific situation and IRS.gov for current tax rules. Hancock Whitney offers investment products, which may include asset management accounts, as part of its Wealth Management Services. Hancock Whitney Bank is a wholly owned subsidiary of Hancock Whitney Corporation. Hancock Whitney Bank, Member FDIC. Trust and Estate services are provided by Hancock Whitney Bank. Hancock Whitney Bank is a wholly owned subsidiary of Hancock Whitney Corporation. Investment and Insurance products: NO BANK GUARANTEE | NOT A DEPOSIT | MAY LOSE VALUE | NOT FDIC INSURED | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY