Protect the business you built.
Your company, your partners and your family all depend on you. Therefore, the right life insurance helps protect each of them, and it can also help you build value outside the business.
Your business and your family share one risk.
Most of your wealth probably sits inside the business. As a result, the unexpected loss of an owner can strain the company, the partners and the family all at once.
Life insurance helps address that risk in several ways. For example, it can give the company cash to replace a key person, and it can fund a buy-sell agreement so partners know how ownership will transfer. In addition, permanent policies can build cash value that sits outside the business.
Because every company is different, your agent starts with your structure and your goals. Then, together you decide which coverage deserves a closer look.
Four ways coverage supports your company.
Key person coverage
The company owns a policy on someone the business depends on, such as an owner or a top producer. If that person passes away, the death benefit gives the company funds to steady operations while it recruits and trains a replacement.
Buy-sell funding
Partners agree in advance how ownership will transfer after a death. Because a policy can provide the cash for that purchase, the surviving owners can buy the shares, and the family receives the agreed payment.
Debt protection
Owners often guarantee business loans personally. Therefore, a policy can help keep your family from repaying those debts out of savings.
Wealth outside the business
Permanent policies, such as IUL or whole life, build cash value over time. In addition, you may access that cash value through loans and withdrawals, although doing so reduces the death benefit.
Simple, personal and handled by phone.
Share your structure
Tell your agent about your company, your partners, your debts and your family. Then explain what you want the coverage to accomplish.
Compare your options
Next, your agent compares coverage from our network of 30 leading carriers and explains how each option fits your situation.
Apply with support
Finally, your agent guides you through underwriting and the application, while your attorney or tax professional reviews the structure.
Policies business owners often consider.
Term Life Insurance
Term life often funds key person coverage and loan protection, because it delivers large protection for a set period.
Learn moreWealth Building (IUL)
IUL can build cash value outside the business, while its permanent coverage lasts a lifetime.
Learn moreWhole Life Insurance
Whole life offers level premiums and guaranteed cash value growth, so it suits owners who prefer predictability.
Learn moreBusiness owner questions, answered.
What is key person insurance?
Key person insurance is a policy that a company owns on someone the business depends on. If that person passes away, the death benefit goes to the company, so it can cover lost revenue and replacement costs.
How does life insurance fund a buy-sell agreement?
Partners agree in writing how ownership will transfer after a death. Because a policy can supply the cash for the purchase, the surviving owners can buy the deceased owner’s share without draining the business. However, an attorney should draft the agreement.
Can my business pay the premiums?
In some structures the business pays the premiums, while in others the owner pays personally. However, tax treatment depends on the structure, so please review it with a qualified tax professional.
Do I need an attorney or an accountant?
Yes, we recommend both. Your agent explains the insurance, but an attorney and a tax professional should review agreements and answer tax questions.
Opulent Life Financial does not provide tax or legal advice. Business uses of life insurance, including key person coverage and buy-sell funding, involve legal and tax considerations, so please consult a qualified attorney and tax professional. Cash value growth in permanent policies depends on policy terms and charges, and loans and withdrawals reduce the death benefit and cash value.
Ready to protect your business?
Speak with a licensed agent by phone, or request your free quote online. Your dedicated agent will then walk you through your options.