Is Corporate-Owned Life Insurance The Right Choice?
Insurance will always be your saving grace when it comes to protecting your business. As a business owner, are you well-versed on all of your options? One type of insurance policy many aren’t aware of is corporate-owned life insurance. While it may be a bit more unconventional, corporate-owned life insurance might be the perfect fit for you and your organization.
Defining Corporate Owned Life Insurance
The main distinction with corporate-owned life insurance is that it is a policy that is purchased by a company, rather than by a singular person, used to insure a specific high-ranking employee or group of employees, within that company. In this scenario, it is the company that purchases and owns the policy, and they are also the beneficiaries that would get the payout, while the key employees are the ones who are insured on the plan.
Situations which warrant Corporate Owned Life Insurance
One main reason a company might consider purchasing a corporate-owned life insurance policy is if the work and value provided by the covered employee or employees are so critical to the business function, that their passing would set the company back significantly, in terms of reputation, customers, and profit. To help keep the business afloat in the aftermath and to help the company find a replacement, this coverage payout can be critical.
Beyond the payout, another advantage is the company can withdraw or borrow against the corporate-owned life insurance policy’s cash value. This can even be seen as a primary benefit of this type of coverage, as no income tax is due on the distribution and this borrowing could end up earning the company additional income, even when paying the insurance premiums.
Want to find out more?
With experienced and caring agents, Schechner Lifson Corporation can make sure you get the right coverage at a price that may just be more affordable than you think. Contact us today to see how we can make sense of the world of insurance, providing you with the best coverage possible.