Small Business Planning
As a small business owner you are responsible not only for the welfare of yourself and your family but for many others as well, including partners, employees and customers. Whether you run your business out of your home or from an office, factory or warehouse, a well-conceived insurance and benefits program is essential.
Life insurance also can be structured to fund a “buy-sell” agreement. This is an agreement among owners to buy a deceased owner’s share of the business at a previously agreed upon price in the event of death, disability or retirement.
Key Person Insurance
Key person insurance is another essential component of a smart business continuation plan. Key person insurance is life or disability insurance purchased by the business on the life of such an employee and payable to the business. When a “key person” dies or becomes disabled, insurance can help make up for lost sales or earnings or cover the cost of finding or training a replacement.
Business Loan Protection
Businesses purchase collateral life insurance to protect the creditors interests, particularly if the death of the businesses owner could affect the value of business assets used to secure the debt or ensure that business debt will be fully repaid & permit the business to continue free of debt.
Funding Capital Gains Tax on a Business Death
Insurance can provide the funds needed to pay the tax liability that results from the capital gains & recaptured depreciation triggered by an individual’s death.
Split Dollar Arrangements
Life insurance’s versatility makes it an excellent choice for meeting a dual need experienced by many small business. It’s common for one party within a business to need the financial protection that life insurance provides against death, either theirs or someone else’s within the company, while another person needs a tax-sheltered investment vehicle.