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Why your Business needs a Whole Life Insurance

Having a life insurance can offer a solid financial foundation and that it also serves to be a suitable tool for different types of businesses. Another thing is that organizations may be able to use life insurances for attracting top talents and to also build loyalty by helping out the employees in protecting their loved ones. It can be used as well for some other purposes like providing protection for the business, key employees and for the family from unexpected deaths.

Other benefits that it can offer are as follows:

Adds Protection for the Key Employees

The executives tend to have higher income and they usually need a much larger death benefit protection compared to those that are being offered by the employer-sponsored programs. Providing your key employees with additional life insurance benefits, it will give them an increased level of protection which is able to suit better with their needs. Through doing this, it can actually help a business in setting itself apart on retaining and recruiting the top talents.

Getting Access to Cash Values

Businesses who have a whole life insurance policy may borrow from its accumulated cash value for various purposes such as: helping the business during economic hardships, paying for overhead prices or to provide supplement cash flows.

Provides an Executive Bonus

Businesses will be able to help key executives for buying added life insurances through their executive bonus plans. The executives will own the life insurance policy and will pay out the premiums and the business or the company will bonus the executive with an amount that is equal with the tax liabilities and its premiums. Also, the executive may use the cash value of the policy for supplementing their retirement funds or perhaps for other purposes. If ever they accidentally died during the employment process, the policy’s death benefits are going to be paid towards the insured’s family, which is income tax-free.

Retention of the Key Employees

A life insurance policy also could be used in helping fund a deferred compensation program that gives more benefits to the retirement of the key employees. In these cases, the business will actually own the policy of the executive and if the employee will retire, the company could then use the cash of the policy in order to provide a supplemental retirement income for employees. When the executive dies prior to the retirement, the proceeds will be paid to the company. The money acquired will be used to re-coup the premiums that were paid and to likewise provide a death benefit to the executive’s family.

Key Employee Insurance

There are so many companies that lose their focus due to the death of a key employee. Life insurances could be used to provide protection for the company from risks of unexpected deaths of key employees. The policy could in fact be structured in a way to provide the company with a death benefit which is equal to the revenue loss and on the administration costs that are needed to find a replacement.

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15. 9. 2020

Posted In: Home Products & Services

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