Life Insurance Can Help Protect Your Business

Jeff Clarke - August 7, 2017 - Business - Leave a comment

As a business owner, you are faced with many challenges when it comes to running a successful enterprise. Without proper planning, the premature death of a business owner may result in assets being liquidated, the business being sold or the business becoming a burden on family members. If your goals are to help:

  • Fund a buy-sell agreement
  • Maintain cash flow for the business
  • Provide liquidity to help sell or re-establish the business
  • Have key-person coverage
  • Offer an affordable optional employee benefit
  • Secure a business loan Scenario: Carla runs a successful flower shop in the suburbs. As her business has grown over the years, she has added employees to manage the workload. As a business owner, she knows that success in business requires careful planning. What she hasn’t planned for is what may happen to her business if she unexpectedly passes away. Would her business be able to continue? She worries about her employees, too. As her business has grown they have become vital to the business. What would she do if one of them were to die? How would she deal with the loss?

Business Life Insurance may be for you. Business Life Insurance may be a strategic and cost-effective solution to help protect your business from the loss of an owner or key employee, and can be an important part of your overall business succession plan. Business Life Insurance can help keep your business running the way you want: Executive Bonus Plan– Keep and recruit your best and brightest employees with an Executive Bonus Plan. Under the plan, you provide select employees an incentive by allocating funds for the purchase of a life insurance or annuity product. Your employees will appreciate the ability to obtain a life insurance product they control. You will like the immediate income tax deduction¹ for the employee bonus and freedom from further administration and/ or benefits tracking. Fund a Buy-Sell Agreement–Life insurance on the business owner can help provide the funds to execute a buy-sell agreement if a business owner dies, becomes disabled, separates or retires.

Buy-sell agreements can establish business succession plans in advance, including a right to purchase the deceased owner’s share of the business, and determining the value of that share of the business. Key Person Insurance–Those select employees with special skills, knowledge or relationships who would be difficult or expensive to replace are the backbone of your business. If one of these vital people became disabled or died, you may be able to use the death benefit or cash value² from the policy to help fund replacement and retraining expenses and to help make up for lost business during the transition. Contact me today at 469-525-7407 as your local Farmers agent, I can help you to build a customized package that includes the life, business and personal coverage that will meet your unique needs, because the more you know, the better you can plan for what’s ahead.


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