shopify analytics ecommerce

Small Business Life Insurance

Life Insurance For Small Business

Have You Given Any Thought To Small Business Life Insurance?

What Type Of Business Do You Own?

  • Is your business a Sole Proprietorship?
  • Are you part of a business Partnership?
  • Is your business an S Corporation?
  • What about a C Corporation? Is this how you incorporated your business?
  • Have you taken advantage of the new Limited Liability Company laws?
  • How about Key Employees? Do you have any employees that you can categorize them as Key Employees?

Shop and compare Insurance Rates from 100's of the Top Carriers. Get the Best Quotes possible - Save up to 70%

How Small Business Life Insurance Works

Life insurance as it applies to each type of business is different in many ways but there are also many similar features in each case as well.

What we are discussing here is not group life insurance but more specifically life insurance as it applies to the owners of each business and life insurance for the key employees.

Let us take a look at each type of business and how life insurance could go a long way in protecting the business itself as well as the heirs of a deceased business owner.

  • The Sole Proprietorship

    Because the owner of a sole proprietorship and the business itself is considered one and the same one may think that the need for life insurance is limited. Nothing could be further from the truth.

    We put in a lot of time and effort building a business that has to be dissolved at our death. We do want to have this business transferred to a member of the family when we die. How can this be done?

    The estate of the sole proprietor can sell the assets of the business upon his or her death. A life insurance policy can be bought during the lifetime of the owner, the proceeds of which would be used to buy the business.

    A buy sell agreement, which would be binding, would determine the terms and the amount to be paid for the business.

    Let us assume the proprietor is married and has a son or daughter who is interested in taking over the business upon his death.

    This young person has spent a lot of time learning the intricacies of operating the business from his or her father.

    So dad decides he wants to transfer this business to this child upon his death. He has a buy sell agreement drawn up by an attorney that would fulfill his desires.

    This agreement is funded buy a small business life insurance policy specially bought for that purpose.

    The proprietors wife is not particularly interested in the business but if the business owner dies before her she will still need income. The proprietor dies.

    The proceeds of the small business life insurance policy is used to purchase the business from the estate and the wife has full value in cash.

    She can use this money to purchase an annuity that would pay her an income for a certain number of years or for a lifetime. Of course this decision will depend on the amount of money we are talking about here.
  • The Partnership

    The use of small business life insurance in a partnership is very simple and straightforward. The ownership of this partnership is in the hands of three partners.

    For the sake of easy explanation let us assume that that these partners own equal shares.

    A buy sell agreement would be set up that would state that the partnership would buy the shares of a deceased partner from his heirs. The buy sell agreement would be binding. The heirs cannot decide they don't want to sell.

    The partnership would buy a small business life insurance policy on the lives of each of the partners in the amount of the value of their shares.

    The proceeds would be used to fund the purchase. In some cases the policies can be owned by the partners themselves. The results are the same.
  • The Corporations

    Small business life insurance for c corporations, s corporations are limited liability companies is very similar to that of the partnership. The corporation usually owns the policies on the lives of the principals.

    Upon the death of a stockholder the corporation buys the stock from the heirs of the deceased. A small business life insurance policy is the least expensive way to fund the buy sell agreement.

    It is recommended that the insurance is updated on a regular basis and that the buy sell agreement is reviewed and updated from time to it is binding.

    For more information on corporations and how to apply small business life insurance go to:

    C Corporations

    S Corporations

    Limited Liability Companies

  • Key Employee Life Insurance

    What state would your business be in if a key employee died? Have you given this any thought? In my 40 years in the life insurance business I have seen many interesting situations.

    Some businesses had no key employee life insurance on their valuable employees...much to their detriment. Others were prepared and things continued on smoothly after the death of the key employee...

    It is recommended that if a business has a very valuable key employee that they buy a small business life insurance policy on the life of that employee equal to about 5 years of that employees income.

    Upon his or her death the proceeds of the policy is paid to the business and used to help keep the business going while the company finds a capable replacement.

Decide how much life insurance your business needs then compare Quality Quotes from Quality Carriers. There is a calculator here that you can use to help determine your needs. Click For More...

Home Articles Small Business Life Insurance 10 Year Term Life Insurance 15 Year Term Life Insurance 20 Year Term Life Insurance 25 Year Term Life Insurance 30 Year Term Life Insurance Term Life Insurance Life Insurance Coverage Term Life Insurance For Women Life Insurance Policy For Home Makers Child Life Insurance Universal Life Insurance Variable Universal Life Insurance Variable Life Insurance Quote Low Cost Term Life Insurance Mutual Funds Financial Planning Life Insurance Quote Whole Life Insurance Retirement Planning Estate Planning Mortgage Insurance Long Term Care Insurance Disability Insurance Online Life Insurance

Copyright © 2004 - 2019 LifeInsuranceHub.Net. All Rights Reserved.

Tools And Resources

Life Insurance Need Calculator

Recent Articles

  1. Life Insurance Quotes - Policy Provisions And Explanations

    Life insurance hub is a service dedicated to assisting you in understanding life insurance quotes and how to apply them to your personal life insurance needs.

    Read More

  2. 10 Year Life Insurance Policy Proceeds - Options And Choices

    Death proceeds from 10 year life insurance can be in lump sum form or incomr form

    Read More

  3. The 5 Year Term Life Insurance Policy Or Rider

    The 5 year term life insurance policy has been around in insurance circles for a very long time. It can be sold as a policy or as a rider to a permanent life insurance policy.

    Read More

  4. 20 Year Term Insurance Policy - 20 Year Life Insurance

    The 20 year term insurance policy is one of the most sought after life insurance policies.

    Read More

  5. 20 Pay Life Insurance

    Take a look at 20 pay life insurance. Most people know that you buy whole life insurance if you want to be covered for the rest of your life even if you live to age 100.

    Read More