What is business life insurance and why do you need it?
Companies can purchase life insurance on the owner or key employees. When the insured employee passes away, the company receives a death benefit. This insurance provides protection and avert risks, including:
Expensive and immediate repayment to creditors
After the death of a key employee, creditors may have concerns about the business and demand immediate repayment of loans. A death benefit on the insured key employee can help fund these repayments.
Finding replacement takes time and resources
Replacing a key employee comes with certain costs. The death benefit payment will provide a cash infusion to help with recruiting a replacement and covering any revenue lost during this difficult period.
Providing necessary security for a business loan
Before receiving a loan for your business, your bank may require a life insurance policy be set up for key employees before they release the funding.
