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Why Whole Life Insurance Is Important For Business Owners

Some business owners are unaware of the importance of having a business life insurance policy. No matter the size of your business, having a whole life insurance policy can offer protection. Obtaining whole life insurance means your business may be able to avoid regular bank loans, better protect its employees and receive tax benefits. Below, the agents at Unity Insurance discuss the most important benefits of whole life insurance for business owners.

Offers Tax Advantages

As a business owner with whole life insurance, you are able to increase your wealth tax-free. In addition, distributions can be taken tax-free if adequate preparation is done. Whole life insurance is also ideal for avoiding high interest rates. Insurance companies pay policyholders interest on the full cash value of their policies, regardless of the size of the policy loan. The payment schedule is determined by the policyholder. The insurance company usually charges a lower interest rate than a standard bank loan.

Helps Recruit Employees and Maintain Employee Relationships

When an insurance company provides a policy, it is because it has been assessed that the policyholder would suffer an economic downfall if the insured dies, also known as insurable interest. As a business owner, your employees are essential puzzle pieces  that make up your business. If an essential employee were to pass away, your business could lose revenue. In most cases, insurance companies allow business owners to have an insurable interest for their employees.

As a business owner, you have the opportunity to incorporate life insurance into your employee benefits packages. With life insurance policies, you won’t have to have an employer match in a 401k plan. 

When an insured employee quits, you have the option, as the business owner, to transfer policy ownership to that employee. The employee retains the cash value of the insurance accrued in their time at the business. The employee would change the receiver to a family member or their estate. Any extra premiums would be the employee’s responsibility if the policy had not been paid up to date.

Can Help Business Partners Keep the Company In Event of A Death

If one of the business owners passes away, there are frequently insufficient funds to continue supporting the company. A buy-sell agreement can help save your business. When one of the owners dies, the remaining owner would be able to use the death benefit earnings from the business life insurance policy to purchase the other owner’s share of the company from their estate.

Contact Unity Insurance Today to Speak With An Agent About Whole Life Insurance

Purchasing whole life insurance can be a beneficial decision that offers protection for your business and employees long-term.  If you’re interested, but know where to start, our agents are ready to assist you. Our team at Unity Insurance can walk you through the process of choosing the right plan for your business.. Contact us today to learn more about our team or to set up a consultation.