How Life Insurance Can Help Your Business Thrive

How Life Insurance Can Help Your Business Thrive

How does life insurance support your business efforts? The two may not seem like they have a link. However, it is important to view this type of investment as one you can control. When you obtain life insurance, you choose who receives the funds. Sometimes, you can control how they work, too. If you have a business you want to last for decades, you may want to consider the value of life insurance. Here is how it may work for you. 

Choose a Policy to Help Support Your Business 

Many startup founders and smaller business owners view their company as their prize. It is the most valuable asset you own.  

Yet, you may not be sure it can maintain its goals long-term. If you were not there each day, would your business continue? If not, what would happen to your customers? What could happen to your employees? This is a very real concern for many companies. Life insurance may help. 

It is possible to leave funds to your business through your life insurance policy. You can use your business as the beneficiary. This means at the time of your death, the death benefit (or payout) goes to your business.  

It is also possible to establish a trust to then manage these funds. With a bit of a legal setup, it may be possible to better control how these funds apply to your company. A trust allows you that type of control. 

Key Person Insurance 

Another type of life insurance is key person insurance. It typically falls under a type of business insurance. However, how it works is very simple.  

The business purchases the policy. The policy covers a specific person who is very valuable to the company. Should this individual die while the policy is in place, the insurer pays the company the set amount.  

Keep in mind, this is not personal life insurance. Your family does not receive the payout. Rather, the business does. The infusion of cash can help support the company for years to come. 

What Is Right for Your Company? 

Most business owners should work with a life insurance agent and an estate planning attorney for this goal. You need to choose the right type of policy. You also need to consider the amount of coverage best for your company. 

Investing in life insurance for your company may be important to you. The right policy can be affordable. It can also give you peace of mind. You know your business has the protection it needs.