Business Life Insurance
Own a Business? Protect it with Buy-Sell Life Insurance and Key Person Life Insurance
Even if you’re just starting up, it’s important to protect your business from unexpected tragedy. Business life insurance is a key element to include in your business continuation plan, and can save your company from going under if an owner or key employee is lost.
Coverage for Business Start-Up Loans
Many banks will require a new loan holder to purchase business life insurance when applying for a business start-up loan. The bank often also require a collateral assignment of benefit documented within the contract.
Buy-Sell Agreement Life Insurance
There are two parts to any buy-sell agreement.
- Part one: A legal contract describes the buy-out plan between partners and their family members, (usually an Entity Purchase or Cross Purchase agreement).
- Part two: The Company purchases life insurance (typically term insurance) to fund the agreement. The insurance proceeds provide enough cash on hand to the surviving partners or family members so they can purchase the lost owner’s share of the business.
Key Person Life Insurance
Key Person (or “Key Man”) life insurance protects against the loss of revenue that would result with the sudden absence of a key employee. Often the key employee in the business is the owner, founder or a person whose absence would sink or close the business. The company is the owner a policy on the life of the key employee. The company pays the premium and is the beneficiary of the policy benefit if the key person dies.
Contact Keith Wallace to discuss your business continuation plan at (360) 734-1161.