Life insurance is important on the personal level, protecting families from hardships in the event of a breadwinner’s death. It also has numerous business benefits.
For business owners, life insurance policies can help keep their company going in the event of a death, either their own or the death of a key business partner or employee. Life insurance can also reduce the chances that the business will be sold under duress, and it can help fund emergencies and business growth.
When speaking with business owner clients and prospects, producers should consider bringing up the following business uses for life insurance:
- Liquidation prevention. If a business owner dies suddenly and without life insurance, his family may need to sell off assets quickly in order to pay the bills. These urgent sales often mean that families accept offers that are below market value. Life insurance can prevent this. The policy payout means families can take their time making business decisions and carefully consider all offers and options.
- Key man coverage. If a business partner or key employee dies, what happens to the company? Purchasing life insurance on vital business partners and employees can give organizations the time they need to replace that individual, without worrying about the financial implications for the business. The life insurance payout can also be used by the surviving partners to buy out the portion of the business owned by the deceased partner.
- Cash accumulation. In addition to providing protection, some life insurance policies build cash value over time. Business owners can purchase these policies and tap the accumulated cash in case of an emergency, for business expansion, or to supplement retirement funds.
Want more information about life insurance and its benefits for business owners? Imeriti has tips and tools that can help. Contact us at [email protected] or 800.921.3100 today.
Imeriti Financial Network