1. Personal life insurance
Personal life insurance is for your family and any personal debts you may have. It can be used to replace your income, pay off personal loans, leave an inheritance to your children and keep your family financially secure.
A general rule of thumb is to have a personal life insurance policy worth 10 times your annual income. For a more accurate estimate, use our life insurance calculator.
Related: How Life Insurance Works
2. Key man life insurance
Key person life insurance, also known as key person life insurance, protects your business if you lose an owner or employee who is critical to the company’s success.
“An owner or key person plays a variety of roles that are critical to the survival of a business – from maintaining assets to meeting debt obligations and operations roles – and such,” says Matt Miller. A sudden loss of an individual can destroy a business very quickly,” says Matt Miller. , Founder and CEO of Embroker.
“Key person life insurance focuses on meeting the needs of the business as long as it covers outstanding loans and buybacks, covering the cost of hiring and training a new employee, and even if “Don’t get on your feet by paying severance obligations if the business needs to. Lay off or lay off workers,” says Miller.
3. Agreement of Purchase and Sale
The last type of business owner’s insurance you should consider is a buy-sell agreement. This is especially important if you have business partners.
A buy-sell agreement is a legally binding agreement between business owners that specifies what will happen to the business if one of the owners dies, becomes disabled, or wants to sell their interest in the business. .
There are two main types of sales contracts:
Cross Purchase Purchase Sale Agreement
In a cross-purchase agreement, the business owners each purchase a life insurance policy on the other owners. The death benefit is paid to the surviving owners, who use the money to buy out the deceased owner’s interest.
Entity Purchase and Sale Agreement
In an entity purchase agreement, the business itself purchases a life insurance policy on each owner. The death benefit is paid to the business, which then uses the money to buy out the deceased owner’s interest.
Credit : www.forbes.com
