Life Insurance for business owners
As a business owner, you may need to protect your legacy and the enterprise you've built. Having a strategy that includes life insurance can be an important step in implementing a succession plan and allowing for continuity, while preserving the value of your business.
Life insurance may help safeguard a business
Structure a buy-sell agreement
Co-owner(s) and/or the company are parties to a contract regarding the acquisition of a deceased owner’s interest in the business
Fund a buy/sell agreement
Insurance does not need to be the funding mechanism, but it may be an optimal option
Periodically review policies and buy-sell agreement
A review measures performance and confirms the status of an existing policy, as the business is likely worth something other than what it was worth when the agreement was entered into
Obtain key-person insurance
On the passing of a top employee, key-person insurance helps cover the costs associated with business disruption, loss of institutional knowledge, search for successor and other factors
Life insurance at J.P. Morgan is a differentiated experience
Frequently asked questions about life insurance for business owners
How can a life insurance policy provide protection against the loss of key employees?
A loss of a key person can subject a business to potential hardship, as responsibilities and relationships can be left unattended for. Sometimes, the loss of a key employee can lead to a decline in company value, so having a thoughtful plan to protect against the uncertain can help fill the gap. The liquidity provided from life insurance can help stabilize the business and keep it going throughout the process of finding a replacement.
What is term life insurance?
An insurance policy for an individual who seeks coverage for a defined period, such as a parent who wants to make sure that the family’s financial needs are met no matter the circumstance.
How can a life insurance policy help secure liquidity to maintain your business?
Providing continuity for a business may be important, and you may want to ensure that there is enough liquidity to execute a business succession plan. Insurance can provide liquidity to buy out surviving heirs. There can be several other ways to fund a buy-sell agreement, including borrowing against the business or using cash flows from the business.
What is whole life insurance?
An insurance policy for an individual who, regardless of when he or she passes away, intends to ensure that beneficiaries receive financial support.
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