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| Frequently Asked Questions |
We just started our business and can't afford permanent life insurance? What other option is there?
Newly formed businesses may benefit from term insurance since the often don't have the cash flow to support premiums for permanent insurance. A convertible term policy will allow conversion into a permanent policy at a later date, without evidence of insurability.
Why is permanent insurance generally preferred over term insurance for funding buy-sell agreements?
Permanent insurance can be structured to provide affordable coverage for life. It also generates cash value available for future business uses. And, it can be structured to grow in value as a business appreciates.
What type of permanent insurance will work best for funding my buy-sell agreement?
Your individual needs and circumstances will determine which product will work best for you. For example, whole life insurance works well for business owners who favor full guarantees with their insurance coverage. To take advantage of growth in the equity markets and keep pace with inflation, some business owners prefer variable universal life insurance. There are many excellent choices. Your sales representative can help you decide which policy is right for your business solution.
Can events such as retirement or disability be part of a buy-sell agreement?
Yes, in fact, many buy-sell agreements contain disability and retirement buyout provisions. To help pay for these future benefits, many business owners coordinate permanent insurance with a disability buy-sell policy. When combined, the policies help pay disability benefits or retirement income on a tax-advantaged basis.
My Business is still growing. Can my buy-sell funding be tailored to provide for additional growth?
Yes, your business could purchase a life insurance policy that is flexible enough to allow for the addition of death benefits without proof insurability. One option is to purchase a universal life policy with an increasing death benefit. Another option is to purchase separate policies as the need arises, provided the owners are still insurable.
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