20/01/2023
3 Rules of Life Insurance to a Business
1. As a funding medium
Life insurance can fund a buy-sell agreement to transfer ownership between partners or stockholders or to fund a deferred compensation plan.
* In a proprietorship- to provide for the maintenance of a business upon death of the sole proprietor.
* In a partnership- to retire a partner's interest at death.
* In corporation- to retire a stockholder's interest at death.
2. As a Contingency Plan
Life insurance can protect the business against financial loss in the event of death of a keyman.
3. As protection.
Life insurance can protect the employees and their families from the problems of:
* debt
* disability
* retirement
