Business-owned life insurance

As a business owner you have options: your life insurance policy can be personally or corporately owned.

There are tax advantages to a business-owned policy. It provides a one-time, tax-free payout for your business if you, your business partner or key employees die.

Life insurance isn’t just a way to help protect your business, it also helps diversify your assets. You also may be able to access the policy’s value.

There are two main types of life insurance for business owners: term life insurance and permanent life insurance.

Depending on your coverage needs, term life insurance and permanent life insurance can be important parts of your business plan now and in the future.

	Term life insurance	Permanent life insurance
When do you need it?	Temporary protection	Long-term protection
Needs it can meet	Protect your new business from the death of a key person Loan coverage	Additional cash flow Fund a buyout agreement Business has funds not needed for daily operations Succession planning
How long does it last?	Specific period	Lifetime protection
Cost	Typically the most affordable type of insurance	Usually more expensive than term life insurance
Benefits	Your beneficiary may receive a tax-free, one-time payment when you die	Your beneficiary may receive a tax-free, one-time payment when you die Build wealth inside your policy, within limits, you can access while you’re alive
Savings component	No	Yes
	View term life insurance	View permanent life insurance

Life insurance can be so much more than protection. Here are some ways that life insurance can help:

Life insurance can be key to help keeping your business running smoothly, whether you’ve just started out or you’re looking for long-term protection.

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