Life insurance
Business protection
In plain EnglishLife insurance that protects a business when an owner or a key person dies.
What it is
When a business depends on one or two people, losing one of them can threaten everything. Business life insurance gives the business, the remaining owners or the family money at exactly that moment.
The three most common uses: key person coverage (the business insures someone vital, to cover lost revenue and the cost of replacing them), buy-sell funding (owners insure each other so the survivors can buy a deceased owner’s share from their family at a fair, agreed price), and loan protection (coverage to pay off business debts — some lenders require it).
How it works
Step by step.
- Look at the risksWho the business depends on, what it owes, and what each owner’s share is worth.
- Set up ownershipThe business, the partners, or a trust owns the policies, depending on the plan.
- Work with your attorney and CPAA buy-sell plan needs a written agreement; tax treatment depends on how it’s structured.
- The payout goes where the plan saysTo the business, to the surviving owners, or to the lender.
The honest version
What’s good, and what to watch.
Every product has trade-offs. We’d rather you hear them from us now than discover them later.
What we like
- Keeps the doors open
- The owner’s family receives fair value for their share
- Lenders and partners are protected
What to watch
- A buy-sell plan needs a written agreement from an attorney
- Tax treatment depends on the structure — involve your CPA
- Review coverage as the business grows
Frequently asked questions
Straight answers.
Who owns the policy?
It depends on the goal. For key person coverage the business usually owns it; for buy-sell plans, partners may own policies on each other.
Term or permanent?
Both are used. Term is common for loans and key person coverage; permanent coverage is sometimes used for long-term buy-sell plans.
Do I need an attorney?
For a buy-sell plan, yes — the insurance funds the agreement, but the agreement itself should be drafted by an attorney.
Often paired with
Related coverage.
Term life insurance
The most coverage for the lowest price, for the years your family depends on you most.
Learn more →Indexed universal life (IUL)
Lifelong protection plus cash value linked to a market index — with a guaranteed floor when the index drops.
Learn more →Whole life insurance
Coverage for your whole life, with premiums that never go up and cash value that never earns a negative rate.
Learn more →General information, not tax or legal advice. Features, availability and rules vary by insurance company, product and state — we’ll walk you through the details of any policy before you apply.
Is this right for you?
Tell us a little about your family and goals. We’ll compare your options side by side — no pressure, no obligation.