Business Life Insurance
Business life insurance is an extensive topic that can’t be covered in one blog post but here’s some data to start with. There’s a helpful article on business life insurance from The Baltimore Sun that speaks to the often neglected concern of what happens to a business (and the business owner’s family) if an owner or key employee should die. What happens to the ownership? What is the financial loss if a key employee, whether an owner or not, should pass away? What would be the reaction of customers? Of suppliers? Creditors?
The best way to avoid this uncertainty is to have business life insurance.
From the article: “Life insurance can provide for the successful liquidation of your financial interest in the business, thereby protecting your heirs. If the business is to be sold outright after your death, the insurance policy will provide working capital for the transition period. A related type of insurance is “key person or key man” insurance, which compensates your company for the loss of any employee who is vital to the business. If a business has multiple owners, each partner could have a life insurance policy to trigger an automatic buyout of the deceased partner’s interest.”
The two most common types of business life insurance are life insurance to fund a buy-sell agreement and to cover the financial loss of a key employee. You can find out more about how to structure these types of business life insurance by talking with the experts at lifeinsure.com.
