Many people think of life insurance only as an individual. Something you need to cover your mortgage, provide for college funds for your children, or replace your income in the event of your death.
Those are all valid and good reasons to buy life insurance, but life insurance is important to your business (large or small) as well.
Some common uses of life insurance in a business are:
Key Person Insurance – If one of the partners in your business should die, there will most likely be a large hole left in your operation, one which you will need to fill quickly by hiring a highly competent person to replace them. The search costs alone could harm your business, let alone the likely increase in salary (since your partner was likely forgoing some salary in return for profits from the company.)
Buy-Sell Agreements – No one wants to have to negotiate with a partner’s grieving spouse in the event of their untimely demise. A written buy-sell agreement takes care of the valuation questions, but the money would still need to come from the partner’s estate/spouse, which could take months (or years!). A buy-sell agreement funded by life insurance policies take care of everything. The valuation clause is negotiated up front, and it’s immediately funded by the proceeds of the life policy. No negotiating, no waiting for funds. Combined with key man insurance the surviving partner(s) immediately have money to buy out the deceased partner, as well as extra money to cover replacing the partner in the business.
Employee Benefits – Having a group life policy is a perk most employees have come to expect. A well-crafted group life policy can provide an employment incentive that sets you apart from the competition, at a quite reasonable price.
Gem-Young Insurance and Financial Services has been providing individual and business life insurance to the Mahoning Valley since 1947. Contact Us today to schedule a free and confidential meeting to discuss your needs.
Gem-Young is Eastern PA and Mahoning Valley’s premier insurance and financial planning firm with offices located in Canfield, North Jackson and East Liverpool Ohio. We are a locally owned, family-run business offering home and auto insurance, business insurance, life and health insurance, and a true wealth advisory asset management service. We believe in making a difference in our client’s lives.