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Life Insurance Considerations for Business Owners
Business owners may evaluate life insurance in connection with key-person exposure, buy-sell funding discussions, succession planning, and employee benefit strategies.
Business continuity questions
Key-person life insurance generally names the business as policy owner and beneficiary on the life of a key employee or owner. A buy-sell agreement is a legal agreement that may use insurance as one potential funding mechanism. Business-owned policies require attention to ownership, consent, beneficiary designations, and accounting treatment.
Coordinate your advisors
Insurance can be one component of a business-continuity plan but does not replace a legal operating or buy-sell agreement. Attorneys prepare agreements and tax professionals advise on tax treatment. Policy design should be reviewed with the business's legal, tax, and financial professionals.