Business Continuation (Buy-Sell)
This is what keeps a business going when the owner either passes away or is no longer able to run the business due to a permanent disability. It allows for the orderly transfer of the business to another party by providing the funds needed to buy out the business owner’s interest.
It is often used when there are multiple owners but can also be set up for a single owner.
Many businesses have one or more key employees that are crucial to the success of the business.
If they were to suddenly pass away or become disabled, the business would suffer.
This insurance allows for an infusion of capital that will help the business survive while a replacement for the key employee is found. It can also be used to help train the replacement.
Employee Bonus Plan
This plan uses a permanent life insurance policy to help reward and retain key employees.
It can be set up a number of ways, but the basics involve the owner buying a policy on a key employee as a type of bonus, and setting up a vesting schedule for the cash value in the policy that entices the employee to stay with the company.