Life insurance what can I say. It is one of the most under sold products in a business policy package. Most business people don’t know or don’t want to except the fact that they have a chance to leave this world before all of their business dreams and goals are complete and because of this a lot of business go out as there are no funds to continue when the owner or key person passes on.
In this fast pace world of bidding business policies for the best rate and hopefully the best coverage a lot of P&C agents pass up the life sale because of trying to save premium or they just don’t know anything about life insurance. So with this fact the first thing a business owner can do when choosing an agent or looking for someone to quote their business is look for and agent that sells multiple lines of insurance. This in a lot of cases can also save the business money as many P&C companies also have life insurance departments and will discount the P&C business if a life or disability product is purchased. Now what business person would not want to have something for nothing or even more coverage for a much smaller price to go along with the coverages they are already purchasing?
When it comes to life insurance everyone needs at least a little term on the Key person or owner to cover loss of time or to bring in someone experienced enough to handle the business from the get go. But as businesses grow they also need to look long term and can get some tax breaks for certain kinds of life insurance policies that they buy on the individuals. This kind of problem needs to be reviewed annually just like the liability, auto, property, and work comp policies especially if the business is in a heavy growth mode.
I recently wrote a policy for one of my large customers that was a very structured policy and took us several months to determine the amounts and ways to put it together. In the end the customer had a permanent life insurance policy that he was only paying a reduced premiums on and will take a tax deduction of around 30% on those premiums. If he stays with the policy for at least 5 years and the policy interest rate stays just at the minimum he will still have more cash value than what he put in so that in turn is an asset to the business or if done properly can be a tax free benefit to his heirs.
I don’t want to get you in over your head by reading this article to the point that you want to run down to your local State Farm or Allstate agent to get something like these policies I am talking about. What I am trying to help you with is tell you when it comes to writing your business policies make sure to find an agent that can handle ALL of the needs of your business or who has the connection to give you a FULL review of your situation. In the end remember that you are as valuable as your buildings, contents, or workers so don’t forget to protect the value of YOU!