Norton Seal A man speaks to his American Family Insurance agent on the phone about how he can protect his business with life insurance.

Navigating Life Insurance

Life Insurance to Protect Your Business

Growing a business is hard work. And if a death were to occur, the financial and emotional effects could seriously disrupt its future. But life insurance offers ways to financially protect your business and provide valuable benefits to help your employees gain financial protection for their loved ones.

How Can I Protect My Business With Life Insurance?

American Family Life Insurance Company offers a variety of life insurance products that can protect your business’ value and help it continue to thrive in the future if a death were to occur.

Protect your business loans and line of credit. With a life insurance policy, you can secure your business loans and line of credit by using that policy as collateral. If your business owns a permanent life insurance policy, the cash surrender value of that policy may be considered an asset of your business.*

Safeguard your business with key employee insurance. As a small business owner, you probably have at least one employee whose value is essential to your financial success. In the event of their passing, you want to make sure your business can weather the loss of their expertise and management skills, as well as the potential loss of customers and sales. Life insurance proceeds can help offset these losses and help cover the recruiting and training expenses you’ll incur finding a replacement.

Plan for the unexpected with a business succession plan. Should a business owner pass away, life insurance can be used as a tool to fund a buy-sell or stock-redemption agreement. It can also provide cash to help offset any losses the business incurs due to the death of an owner, as well as help pay off any business debts.

How Much Coverage Do I Need?

The life insurance death benefit for your business is the amount of money the beneficiary will receive if an insured person passes away. Not sure how much coverage you need? Your American Family Insurance agent can help. When working through this decision, you’ll want to consider things like the fair market value of your business, any outstanding debts and any key employees you’d want to cover.

Can I Offer Life Insurance To My Employees?

You can. Offering an employee life insurance as a part of your company’s benefit program can help you attract, motivate and retain employees. You select the employees and decide how much life insurance premium you want to pay for each of them. The employee applies for and owns the policy, including any cash value if it’s a permanent life insurance policy, and chooses their beneficiary. Premiums may be tax deductible* for the employer as compensation to the employee, and the employee pays income tax on the premiums paid by the employer.

Planning for the future of your business goes beyond financial goals — it’s about putting a plan in place to protect your business, its employees and your family. Your American Family Insurance agent can help you put together a life insurance policy that can help you financially protect your business.

*Neither American Family Life Insurance Company nor its agents are authorized to give legal, accounting or tax advice, and nothing in this article should be construed as such advice. Please consult a tax advisor, accountant or your attorney for answers to your tax, accounting and legal questions.

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Related Topics: Whole Life , Term Life , Cash Value , Buying Life Insurance