Life insurance for business owners

Why business owners need life insurance

Owning a small business means you have not only your family depending on you, but employees and vendors as well.  Your untimely passing could mean disaster to not only your family, but those of your employees as well if you have not planned properly.

In most cases, there is significant equity built into the business you own, not to mention your family depends on your income to survive.   Failure to adequately protect that equity and income could mean disaster if another member of your family is unable to step in immediately and run the business.

Buying a life insurance policy and implementing a buy/sell agreement can help protect your loved ones and employees by providing not only leadership direction in case of your death, but the financing mechanism to adequately fund the transfer of ownership.

A buy/sell agreement is a legal document that outlines what happens to your business in case of your death.  It states who will become owner of the business as well as the payment terms surrounding the transfer of the business.  In many cases, these are funded by a life insurance policy that the business buys to cover the death of the owner and/or key employees.  For example, if you were to pass and the business had a 1 million dollar policy on you, the policy death benefit could be paid to your family for the equity stake in the business and the new owner could step in and run the entity. 

This is just one example of many ways a buy/sell agreement can be structured.  It is best to speak with an attorney to implement the document and we can then help put in place the insurance to fund the agreement.

To obtain coverage for a business owner or key employee...