Business Loan Insurance
Life insurance can provide the business with cash when death strikes a key executive or business owner and assures creditors that their loans are safe.

Buy-Sell Agreements   ^ TOP
A buy-sell agreement ensures that surviving owners of a business have the right to purchase the interest of any owner when that owner dies. It also ensures that the deceased's beneficiaries receive financial compensation.

Taking that much cash out of the business could create financial problems, so the purchase is typically funded with life insurance policies on the business owners.

Key Person Life & Disability (Executive Insurance)   ^ TOP
Key person insurance, also known as business protection insurance, is coverage taken out on a key employee by a business to protect the business against financial loss, in case the key person becomes disabled or dies. The key person may be an owner, an inventor, an executive or anyone else whose loss would potentially harm the company.

Retirement Planning   ^ TOP
Life insurance also can play an important role in funding a retirement plan.

A cash-value plan can be used as an executive bonus or a split-dollar plan, where the employer pays premiums on life insurance for a key employee, then collects them back from the death benefit when the employee is deceased. The remainder of the death benefit goes to the deceased's survivors.

It can also be used to finance deferred compensation plans or executive bonus plans. Deferred compensation plans typically supplement or are used to complement 401(k) plans and other qualified retirement plans. They also offer significant tax advantages, but without the regulations that limit the use of qualified plans.

Survivorship Life (Second-To-Die Insurance)   ^ TOP
Life insurance is often used to provide heirs with funds to pay their estate taxes. For married couples, estate taxes are not due until the second spouse dies, so there is no need for separate life insurance policies. Survivorship life, also known as second-to-die insurance, covers two people on one policy, so it costs less than two policies.