Key Man Life Insurance is just as it sounds: life insurance on the key person in a business. In a small business. This could be the owner, the company founders or one or two key employees – people whose continued presence is crucial to the success of the business. Too often business owners are too busy keeping the business going and profits up to think about insuring those important people.
With key man insurance, the company buys the life insurance on the key employee, pays the premiums and becomes the beneficiary of the insurance. If the key man dies, the company receives the insurance benefit to help keep the business going. Insurance benefits can be used to find someone to replace the key man or, if that is not realistic, to meet the expenses of closing down the business. Key man insurance can help pay debts, repay investors, provide employee salaries, avoid bankruptcy, etc. When a business depends on a key person, key man insurance provides help in a traffic situation.
The 412(i) Term Life Insurance plan is a business retirement plan, funded with insurance and annuity products (or annuities alone), backed by the ability of the company issuing the plan to pay claims. This means that the market risk is borne by the insurance carrier, rather than by you and your business. This plan allows you to make larger tax-deductible contributions than with any other qualified retirement plans.
When a participant dies while the plan is in force, and a portion of the funding comes from life insurance, the participant’s beneficiaries receive the net death benefit tax-free. The net benefit can also be used for estate liquidity and survival needs. As long as a life insurance policy remains in the 412(i) plan, the participant will be taxed annually on the economic benefit. Loans are not permitted under this plan.
Why it pays to let LM Financial help you find the best, most affordable business life insurance
We will contact you promptly.
We will never sell your personal information to anyone.
Our computerized quote database accurately determines the coverage you qualify for.
You will get quotes from several highly-rated insurance companies, to make sure you get the best coverage at the best price.
We will assist you in getting your life insurance policy issued quickly and efficiently.We are committed to providing excellent customer service and the best term life insurance.
