When former HHGregg CEO and executive chairman Jerry W. Throgmartin passed away in January after a sudden illness, his old employer collected a $40 million payout  from a life insurance policy it had taken out on Throgmartin years earlier.

The electronics retailer will pay $600,000 to Throgmartin’s personal estate, in accordance with the terms of an employment agreement, and plans to keep the rest for “general corporate and working capital purposes.”

Companies often purchase key man life insurance policies to protect against potential expenses that may crop up after the loss of an important executive. Throgmartin, whose grandfather founded the company in 1955, oversaw explosive growth at the retail chain, but had relinquished his role as CEO in 2009.

Read the whole story.