How Life Insurance Creates Value For Your Business?
Most people understand the value of life insurance for individuals and their dependents, but did you know that there are many ways to use life insurance to help your business? Here are a few examples for you to consider:
- When the owner of a business dies, the business often dies with them, hurting the surviving employees and their families. A key-person life insurance policy provides for such an occurrence, with benefits that can be used to keep the business going, replacing lost profit and giving the business time to find a replacement and get on its feet again.
- When a business has more than one owner, and one owner dies, often the decedent's share of the business passes to family members, who may not understand or even want to be in the business. A buy-sell agreement is an insurance policy that covers all of the partners in a business, and provides benefits that allow the surviving partners to buy out the share of the one who has passed away.
- Another creative use of life insurance is called "split dollar" life insurance. Split dollar life insurance is whole life with the premiums paid in part by the employer and in part by the employee. If the employee dies, the business receives back an amount equal to the premiums, while the employee's beneficiaries receive the remaining death benefit. And if the policy is terminated for some other reason, the business receives back the cash value of the policy. Split dollar life insurance is a great way to provide benefits for employees and investment value for the business.
- Deferred compensation is another creative way to use life insurance to benefit your business. With deferred compensation, a company owns a life insurance policy on a key employee, and is the beneficiary of the policy as well. If the employee dies, the death benefits are received tax free by the business, and an annual sum is paid to the employee's survivors for a specified period of time.
- Corporate Owned Life Insurance help to create additional wealth, funds the business obligation and help you earn the pretty rate of return on your assets.
Life insurance – it's an employee benefit that can also benefit your business! Find out more by speaking with a BeamaLife specialist today at (877) 972-3262 or complete free life insurance quote request form now.