The obvious reason for Life Insurance is to leave funds to help those left behind with debts, income loss, offset taxes if other monies are received.
BUT..
There’s much more to it than that.
There are “Living Benefits” for yourself while you live:
Life Insurance is an essential tool to cover risks if you pass away; but, also, Life Insurance is a viable way to solve life’s financial situations while you are alive!
For those businesses that have partners, there is risk if one partner passes away: the surviving partner would need to pay off the family of the deceased partner.
This could force the sale of a business.
To avoid this conundrum, the purchasing of ”Key-Person Insurance”, a Life Insurance policy, is the way to go.
The way it works is that each partner takes out a life insurance policy naming the business or the surviving partners as the beneficiary(ies). The amount of the policy would be each partner’s portion of the business’ worth. There are multiple benefits to setting it up this way:
Additionally, if the business has just one owner, the business still should have a life insurance policy to protect the owner’s family’s income while they figure out what to do with the business.
Carolyn Muccioli helps individuals and business owners by educating them on the basics of advanced planning and leading them through a process to identify planning opportunities. Ultimately, this allows the best solutions to get done in the most efficient and risk-free system available.
Carolyn Muccioli holds her Health and Life Insurance licenses along with Certified Long Term Care designation. She has been in the financial planning industry since 2008.
As an independent wealth manager, Carolyn serves high income and business owners in the following: