Is the Vision of your Company one of Long-Term?
Are you starting a business that will last beyond your lifetime?
Life Insurance Policies are an important financial tool for your business.
Key Employee life insurance policy
One way of achieving protection for your business is to get a life insurance policy for that important person without whom the company would not be able to succeed. A person whose abilities, talent and work are key to the survivorship of the business can qualify for this kind of insurance. With a Key-Employee life insurance policy, you are guaranteed that your business will survive if that person passes away.
Under this policy, the Key Employee is the one insured and the beneficiary is the company. In the event that the Key Employee dies, the money from the death benefit will be used by the company to pay the rent, utilities, salaries and other expenses until a new person can replace the deceased.
Another way of achieving coverage is by signing a Buy-Sell Agreement.
This contract is custom designed to prevent disputes between the partners in case one of them becomes disabled, retires, passes away or simply decides to sell their share.
The Buy-Sell Agreement should include a life insurance policy so in the event that one of the partners passes, the surviving partners receive the death benefit to buy out the shares from the deceased partner’s heirs.
The conditions of the buy-sell agreement are stipulated in a contract so that the heirs are not potentially left with an ongoing business they might not know how to manage. Instead of getting the business, they will receive a lump sum from the life insurance policy. Due to its importance and significance, it is highly recommended as one of the first contracts you should sign right at the starting stages of your business.
I have helped many companies with different situations achieve peace of mind. Give me a call, let’s talk about it.