Posted April 18th, 2018 by Alexa Goyette
Set a plan in advance to keep your business safe. That's where life insurance comes in.
As a business owner, you've put years of hard work into your company. It's part of who you are. If something happens to you, you don't want the business to crumble.
The death of an uninsured business owner can create a domino effect. Without life insurance, a death can put a financial strain on many people:
- Business partners
Business owner life insurance options
|Policy type||Who is it for?||What it can cover|
|Personal life insurance||Anyone with financial obligations||
|Life insurance to fund a buy-sell agreement||Businesses with multiple partners/owners||
|Key person life insurance||Businesses that have employees with specialized skills||
Types of life insurance for business owners
Personal life insurance
A personal life insurance policy can give your family an important financial safety net, including business loans and debt that your family is responsible for. Non-business obligations that can be covered include:
- "Income replacement" if your family relies on your income
- Mortgage payments on a house
- Future college expenses for children
Life insurance to fund a buy-sell agreement
A buy-sell agreement allows business partners to buy out your share of the business. It can help make a smooth business transition if a partner dies.
Key person life insurance
If an employee's expertise or experience helps drive the business, key person life insurance can be a good option. It can compensate the business for financial setbacks faced after losing a crucial person.
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