Business Life Insurance
Business Life Insurance
Life insurance can ensure financial security and serve as a beneficial tool for businesses of all sizes. Companies often use life insurance as a valuable benefit to attract talented employees. Business owners can also use life insurance for other purposes, such as protecting their family members, business partners, and key executives from a premature death. If you are looking to protect your company in case of this situation, we’ll go over the basics of business life insurance and why it is essential.
Key Person Insurance for Businesses
Business life insurance is also known as key person insurance. This is a policy that companies can purchase on the life of an owner, top executive, or other person who is critical to the business. Key person insurance is essential if the insured person’s death would be would be a setback to the future of the business. The company is also the beneficiary of the policy and pays the premiums.
How is Key Person Insurance Used?
The death benefits from key person insurance can be used to cover the costs of recruiting, hiring, and training a replacement for the deceased employee. If it is not possible for the business to continue operations, it can also use the benefits to pay debts actually a requirement for SBA loans), issue money to investors, and provide severance to employees.
To determine whether businesses require key person insurance, company owners must first examine which employees are irreplaceable in the short term. When a key employee retires, the business can use the policy’s cash value to provide additional retirement income to the employee. If this employee dies before retirement, the benefits would be paid to the company and the employee’s family.
Cost of Key Person Insurance
The cost of key person insurance depends on the size and type of business, along with the key person’s role, age, and overall health. The cost will also depend on whether the business purchases a term life policy or a permanent life policy. In most cases, term life insurance is significantly less expensive.
Find Affordable Business Life Insurance
At The Hinerman Group, we have many years of experience helping businesses obtain affordable life insurance. To find the best type of life insurance coverage for your business, contact the experts at The Hinerman Group today!
More Questions? Check Out Our Blog!
The Hinerman Group knows that every situation is unique and it can be difficult finding the best answers. Be sure to check out our blog where you will find a comprehensive bank of topics covered regarding Life Insurance. The background covered in The Hinerman Group blog will point you in the right direction and help you get your family the coverage you need.
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