Did you know that life insurance is not just for
individuals? Life insurance can be bought by a business owner to insure the
business in the event of the death of a key employee. On today’s blog we would
like to discuss life insurance policies for business owners and what one can do
with the benefit money.
Purchase a buy-sell
agreement
Generally, with a buy sell agreement it is determined before
hand what will happen if the owner or a key person dies, or leaves due to a
personal decision or disability. The death benefit from a company-owned life
insurance policy can be used to purchase the decedent’s interest in the company
from their heirs.
Replacing lost income
In the event the business continues, there may be a time
where the business closes doors for a bit while survivors make a new plan to
move forward. If this were to happen, the death benefit could be used to
replace lost revenue or pay for costs associated with keeping the doors open it
may also help the surviving owners avoid borrowing money or selling assets.
Replacing lost income
Most likely, any business owner has family members that are
dependent on income from the business. If they were suddenly gone, the proceeds
from the death benefit could replace the family’s lost income for a little
while until they figure things out.
For a more in-depth article about life insurance for business
owners, click here,
or for personalized attention, please feel free to call out office at
201-342-3300. One of our associates will be happy to speak to you.
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