subject: Term Life Insurance - Benefits For Business Owners [print this page] There are a number of useful ways your term life insurance policy can help your business. As a business owner, it is beneficial if you learn some of them. This gives your business an added protection most especially in todays markets volatility.
So, how can a term life insurance help business owners?
Term life insurance can be used
As collateral for loan - this is useful especially if you are starting a business or planning to upgrade the business you already have established. When you apply for a loan, the lending company or the bank usually requires collaterals, and, fortunately, term life insurance can be used. With this kind of insurance, you are buying a policy for your company as your company name is what is written as the sole beneficiary. Once you have acquired this kind of policy, you, the business owner, can get loan collateral with it in the form of a lien against any proceeds received from the policy.
As an instrument for buy-sell agreements is another yet good option you can go for life insurance business protection. With buy-sell agreement, you, your business buddy or the corporate entity can take out a life insurance policy that is readily available to give the needed funds to facilitate a buyout of that share of the company ownership. One significant advantage of this is that it can avoid a lot of potential conflicts or difficulties in case your business partner or one of your co-owners dies.
As a key person insurance - is another way you can use life insurance to protect your business. The company takes out a policy on the key man and assumes the role of beneficiary. Key person insurance can be allocated in whatever ways your business deems necessary in the event that the key person passes away.
As a way for leveraging your account receivable - supposing you do not have a liquid asset to buy an insurance policy because all your finances are tied up in your business, real estate, and so forth, you can still secure a loan - leveraging your account receivable is a qualifying asset for it. What is interesting with this kind of arrangement is not just the fact that your business now has protection against the death of an owner or key person, but also the way it opens opportunity for future buying power.
In today's erratic business climate, there are more compelling reasons why make use of insurance policy for business protection. Having this added security for you business, you can now spend more time focusing on ways of making your business grow.
by: Deagan Falyn
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