Learn how to maximize your business life insurance with a plan designed just for you business.
When most people think of life insurance, perhaps the most common scenario that comes to mind is a person wanting to protect and provide for their family members after they’re gone. While life insurance policies to protect loved ones are very common, there are beneficial ways in which businesses can put life insurance policies to work as well.
The most common ways a business will use a life insurance policy are to fund a buy-sell agreement or to cover an employee who is vital to the business. While ‘key person’ life insurance plans are worth looking into if you’re a business owner, the focus of this article will be using life insurance policies to fund buy-sell agreements.
There are often instances where more than one person owns a business or at least owns shares in a business. The instances in which a buy sell agreement are necessary is if the business partners would not likely have enough money to buy out the other partner’s stake in the business, in the form of a payment to that partner’s heirs, should they pass away. There are few business owners who would have the type of money that would be needed to make such a big payment, readily on hand, and so a way to find a buy-sell agreement is necessary.
One of the reasons more and more business partners are turning to life insurance policies to fund these types of agreements is because they are the most efficient ways to get money to the other partner’s heirs or beneficiaries. There is no wait time where a life insurance policy’s benefits are concerned, like there would be with some other sources of funds. All partners involved can rest easy knowing that if they die, their spouses, families or whoever else it is that they support will be able to continue living as they did before, without struggling financially.
If your business could benefit from this type of arrangement, with a life insurance funded buy-sell agreement, get in touch with a licensed insurance agent to learn more. Learn more about this and other life insurance for business uses.
