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 Business
Insurance can fund untimely events to key business persons or owners
that can cause critical financial disruptions to the business.
Business life insurance can be used to fund the impact of a death.
Business Life Insurance Is Used To Fund Business Arrangements
The most common uses for Business Insurance are:
Overview
The Most Important Types of
Arrangements Are:
Transfer Coverage "a will for your business"
Owners can execute a buy-sell agreement and fund the
agreement with
life insurance. A buy-sell agreement is an arrangement for a
business to continue in the event of the owner's death,
disability, retirement, or early withdrawal from service. Life insurance, through the death benefit or cash
values (if a permanent policy is used), can provide the
funds for the surviving or new owner to purchase the interests.
Business Buy-Sell
Partnership Buy-Sell
Corporate Buy-Sell
Debt Coverage
The proceeds of coverage can provide funds to
payoff debts in the event of the owner's premature
death. The policy is taken out on the life of
the owner when the debt is first incurred. Other policies
can be obtained for disability.
Business Debt Coverage
Key Employee
Protection Plans
The loss of a key
employee can severely impact the financial health of a
business in several ways: lost sales; costs of recruiting,
hiring and training a replacement; costs to continue the
salary to the employee or the family; or loss of credit. Deteriorating financial health can
lead to the loss of customers and harm a good
reputation. Life insurance can provide
funds to temporarily replace lost profits as a result of a
key employee's death, strengthen the business's working
capital, reassuring other employees, creditors, and
investors about the continuity of the business, and provide
funds to recruit and train a suitable replacement.
Key Employee
Non-Qualified Deferred Compensation (NQDC) Plans
NQDC plans funded with life insurance can help attract and
retain key employees. Such plans are contracts between
employers and key employees to pay future compensation for
work performed now. Most NQDC plans provide for a stream of
payments to be made to the employee following retirement.
The payments typically come from the cash value of a
permanent (rather than term) policy. The
employee is not taxed on the money until it is received.
Non-Qualified Deferred Comp
Executive Bonus Plans
Another way to
provide an extra benefit to key employees is through an
executive bonus plan. With this plan, the employer gives a
bonus to a key employee who then pays taxes on the money and
uses the remainder to purchase a life insurance policy. The
employee has all ownership rights in the policy, such as
access to the cash value and the power to
designate
beneficiaries, while the employer receives a tax deduction
for the disbursement.
Employer Executive Bonus
Supplemental Executive Retirement Plans (SERPs)
SERPs provide key employees with supplemental retirement
income generated by the cash value of a life insurance
policy. Qualified defined contribution plans are limited to
considering only the first $200,000 of compensation when
arranging retirement benefits for highly compensated
employees. SERPs layer in on top of such defined
contribution plans, allowing for the key employees to have a
total retirement plan package.
Supplemental Executive Retirement
Business Insurance Is Offered In The Following States |
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TermLifeAmerica.com-
Lewis Fink is licensed as an
insurance agent offering Life
Insurance in the following states:
Alabama - AL,
Arkansas - AR,
California -
CA,
Colorado - CO,
Connecticut -
CT,
Delaware - DE,
District of Columbia - DC,
Florida - FL,
Georgia - GA,
Idaho - ID,
Illinois - IL,
Indiana - IN,
Iowa - IA,
Kansas - KS,
Kentucky - KY,
Louisiana - LA,
Maine - ME,
Maryland - MD,
Massachusetts
- MA,
Michigan - MI,
Mississippi -
MS,
Missouri - MO,
Montana - MT,
Nebraska - NE,
New Mexico -
NM,
New Jersey -
NJ,
New York - NY,
North Carolina
- NC,
North Dakota -
ND,
Ohio - OH,
Oklahoma - OK,
Pennsylvania -
PA,
Rhode Island -
RI,
South Carolina
- SC,
South Dakota -
SD,
Tennessee - TN,
Texas - TX,
Utah - UT,
Vermont - VT,
Virginia - VA,
and
Wisconsin - WI.
Not all
insurance products from all
insurance companies are available in
all states.
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