Without certain kinds of business life insurance like key person coverage or an insured buy-sell agreement on the partner who died, our fictitious business may have serious problems and be forced to liquidate or even close shop.
When asked about premium amounts and what costs and range policies are associated with business life insurance coverage, Betti explains it depends on the age, health, and level of coverage desired.
The one extra dimension that is unique to Alaska is the mosaic of industries and locations that have used business life insurance options.
Franchisees have three very important business life insurance needs: life insurance and nonqualified benefit programs for key employees and life insurance-backed business succession arrangements.
A second important use of business life insurance is to retain top talent using nonqualified benefit programs, such as bonus plans, split dollar and nonqualified deferred compensation arrangements.
As a next step, you may wish to schedule some time to review the personal and business life insurance needs of your existing franchise clients.
Here's what we found regarding business life insurance ownership, business succession plans, business continuation plans and professional business valuations.
For example, while "key person" coverage is the most commonly owned business life insurance, it is only in place in 12% (31% x 39%) of businesses owned by the high net worth.
CPAs should emphasize this important goal as they help clients review their disability protection, business life insurance
, 401(k) and other retirement plans, as well as their succession plan.