Business owners should not only look into personal insurance to protect family finances, but they also need to review opportunities to safeguard the stability of their company should something happen to themselves or a key employee.
Two forms of life insurance to consider as a business owner:
- Key Man Life Insurance
- Protects against the loss of someone who is critical to the survival/growth of the business
- The proceeds from the policy can be used to pay off debt, acquire new talent, or use as operating cash until a solution is solidified
- See our LinkedIn Post about this topic last week!
- Buy-Sell Agreement
- This serves as a contract between partners in a business as to what will happen if someone dies, becomes incapacitated or wants to sell their share of the business
- Cross Purchase Buy-Sell – Each owner buys a life insurance policy on the others. The death benefit is paid to the surviving owners who purchase the deceased party’s business interest.
- Entity Purchase Buy-Sell – The company owns the policy on each owner, and buys their share of the business should one pass away.
- This serves as a contract between partners in a business as to what will happen if someone dies, becomes incapacitated or wants to sell their share of the business
These policies are very important for business owners to review in order to protect the asset they have worked so hard to build.
Let us know if we can help arrange a consultation with one of our trusted insurance providers in order to understand the options available to you.
Matt and Andrew