Life insurance can help take care of your family if something happens to you. But many business owners don’t realize that life insurance can protect their company as well. Here are two valuable forms of life insurance designed for business owners:
Buy-sell agreement. With this type of life insurance coverage, if a co-owner dies, the remaining business owner or owners will have the funds to buy out the portion held by the co-owner who died at a previously agreed upon price. The buy-out money is payable to the deceased person’s family or whomever inherited the business shares.
“Key person” coverage. This type of life insurance is designed to protect a business from the death of a key employee, typically defined as an employee who has a major ownership and/or decision-making role in the business. This insurance provides a payout to the company, providing the owners with financial resources that can help ensure the company is able to continue on with less or no hardship.