Business owned life insurance is insurance owned by the business usually on the lives of shareholders or key employees.
Business life insurance can be used for a variety of purposes, including the funding of a buy-sell agreement, key person protection, covering a loan and more.
Cash value life insurance is often used as part of an executive compensation plan to supplement retirement.
In Canada, the death benefit is received by the company tax free, a portion of which can be paid out as a tax free capital dividend to shareholders (a simple explanation of a complex issue). This provides some estate planning opportunities.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
A business is an entity. The business has insurable interests in specific employees. It can, with the cooperation of the employee, purchase life insurance on any employee. If the loss of a certain employee will have a negative effect on the company, they may buy insurance on that employee’s life. Banks will loan money to businesses but require “personal guarantees.” In these cases the company buys life insurance to cover the loan so that the bank’s interests will be satisfied immediately. There are many other instances where a company will buy insurance on an employee.
That is an excellent question! There are times when an employee is so important to a business that if they would pass, the business would suffer, and possibly fail. To help guard against that, there are policies that the business can purchase to provide in the event of that employees death. For example, two people own a business. One passes, and the policy provides enough money for the remaining partner to buy the deceased partners share of the business. Or a company insures its best technician, because should they pass, the company would have a loss when they have to hire and train a replacement. The tech and his family see none of the money, it stays with the company. I hope that helps. Thanks for asking!
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Business life insurance can be used for a variety of purposes, including the funding of a buy-sell agreement, key person protection, covering a loan and more.
Cash value life insurance is often used as part of an executive compensation plan to supplement retirement.
In Canada, the death benefit is received by the company tax free, a portion of which can be paid out as a tax free capital dividend to shareholders (a simple explanation of a complex issue). This provides some estate planning opportunities.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.