Protect Your Business

Here are two ways life insurance can ensure that your company and business interests don’t die with you, plus a link to financial calculators that can help give you a general idea of how much life insurance you may need:

Business-continuation plans
Life insurance can prevent your company and business interests from being buried with you. A business-continuation plan is an insurance plan designed to enable a business owner (or owners) to provide for the business's continued operation if an owner or partner dies. Any sole proprietorship, partnership, or corporation that is owned by only a few individuals should consider establishing a business-continuation insurance plan.

Life insurance can be a major component of a business-continuation plan. If you are an owner of a closely held business, your share of the business will become a part of your estate in the event of your death, and all your liabilities will need to be paid by the estate. Often in these instances, the executor or administrator of the deceased's estate is forced to liquidate the business in order to provide the funds to pay these liabilities. Surviving heirs are forced to accept whatever price they can obtain for the assets at the time of the sale. This amount may be far less than if they had been able to wait for more acceptable offers.

A properly prepared buy-sell agreement, funded with life insurance, can alleviate many problems associated with the untimely death of a business owner. A buy-sell agreement is an agreement in which (1) one party agrees to purchase the financial interest that a second party has in a business following the second party's death, and (2) the second party agrees to direct his estate to sell his or her interest in the business to the purchasing party. Business partners or employees interested in taking over a business purchase life insurance on the owner and, in the event of the owner's death, use the proceeds to help cover the costs associated with assuming the owner's share of the business.

Key-person insurance
Key-person life insurance is insurance that a business purchases on the life of a person whose continued participation in the business is necessary to its success and whose death would cause financial loss to the business. A key person could be an owner, a partner, a top salesperson with important business contacts, or another employee of the business. The business owns, pays the premiums on, and is the beneficiary of, the insurance policy. In the event of a key person's death, the business can use the policy proceeds to replace income the employee generated and cover the costs of finding and training a replacement. Key-person insurance can also enhance a business's credit position, as it indicates to banks, creditors, and suppliers that the business has protected itself by insuring the lives of its key people.

How much life insurance do I need?
How much life insurance you need usually depends on several factors. You can use our financial calculators to get a general idea of how much you may need. If you want a price quote, click on the link below. A Beneficial financial professional can help you analyze your financial situation and provide you with personalized options and solutions to help you reach your financial goals, including helping you determine how much coverage you may need.

Fixed life products are offered by Beneficial Life Insurance Company, 150 Social Hall Ave., P.O. Box 45654, Salt Lake City, Utah 84145-0654, (801) 933-1100. These products are not available in all states. Beneficial Financial Group is a marketing name for Beneficial Life Insurance Company, its affiliated companies, and sales representatives. The policy contains the actual governing contractual provisions. Guarantees are subject to the claims-paying ability of the insurer. Beneficial Financial Group and its respective agents, representatives, and/or advisors, do not offer tax or legal advice. Please consult your attorney, accountant, or tax advisor about specific points of interest to you.