Buying life insurance as a business owner is not an issue you should take lightly. It is important to do your research and buy a life insurance policy that will suit your needs. Many life insurance policies exist for business owners, each of them for a different reason. In this article, we will explain the five things you as a business owner need to consider before buying life insurance.
You need to consider how much money will help to run the business if you die. The amount of coverage you need will affect the worth of the life insurance policy you buy.
Length of policy
If you will not keep your business for a long period, you could buy a term life insurance policy. However, a permanent life insurance policy is great for the business owners who may hand over the business to their children.
Purpose of the policy
One important thing to consider before buying life insurance is the purpose of the policy. If you wish to protect your business in case an important employee dies, you can get a key person insurance policy. Many other insurance policies are available for consideration.
In most cases, life insurance is not subject to taxation. However, if you aim to grow cash value tax-free, you have to consider the type of life insurance policy you buy.
You should also consider your dependents when buying life insurance. By thinking of your dependents, you can choose a life insurance policy that will replace your income when you die.