06 May Everything You Need to Know About Life Insurance for Business Owners
The various types of life insurance for business owners is sure to help you decide how much life insurance you need for your business and what kind of policies you should consider.
Types of Life Insurance for Business Owners
The policy you choose as a business owner should be in relation to your company’s goal so that it can cover your different needs.
- Personal Life Insurance: This kind of insurance policy will provide financial support to family members who might be dependent on your income, as well as a death benefit to your beneficiary in the event of your death. Some of the types of personal life insurance to choose from include: term life insurance, whole life insurance and universal life insurance.
- Key Person Insurance: This policy pays death benefit if an integral person to the business passes away. As a business owner, you can purchase key person policy on yourself or for an integral employee. Your business is then listed as a beneficiary for the death benefit amount which can go into recruiting or training a new employee, or for the payment of debt acquired by the business.
- Life Insurance to Fund a Buy-Sell Agreement: This is the best kind of policy for a co-owned business and it protects your business by helping you set up a price at which your shares of the company can be bought by its co-owners. This will save your family the stress of negotiation even after your death.
Application of Life Insurance as a Business Owner
In order to purchase the best, the following are tips on how to apply for life insurance as a business owner.
- Decide which policies you need according to the type of business you run. Each policy has its own pros and cons, so it is important that you choose the right one so as not to spend more than you need.
- Decide who will buy which policy in the case of a buy-sell agreement where each owner will have to purchase insurance on the other owners.
- Determine the death benefit level for each policy, whether it’s just enough to cover funeral expenses, or to replace your income for a substantial amount of time.
- Collect and compare quotes by reaching out to providers to determine which will be the best for you.
- Undergo medical exams for each policy you wish to purchase.
- Make a selection of who you want to be your beneficiary; it could be your family member, employee, co-owner or the business itself.
- Sign the policy to begin your coverage.
You can contact an agent or insurance company if you have any more questions about the underwriting process. Contact Kevin or Marci at Dougherty Insurance. We have the answers to important life insurance questions that will allow you to make the right decision when it comes to protecting your family’s future. Take the time to make the call today!