
Sign up & start saving!
Get our weekly newsletter for the latest in money news, credit card offers + more ways to save
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Updated
As a business owner, it’s not just your family and loved ones who rely on your income to survive. You have a duty to your business partners and employees, too. That’s where a life insurance policy can come in. Along with giving your workers a sense of financial security, it can also provide you with the peace of mind of knowing that your company will have the cash flow it needs to continue running if you pass away.
There are three main types of business life insurance that can protect your company. These are:
Key man insurance is a life insurance policy that insurers the employer against the loss or permanent disablement of a key worker in the business.
You can take out key man insurance on any employee whose loss would impact the companies profitability and result in additional costs including:
As well as a business partner, other employees who can be considered a key person in a company include:
This is far from an exhaustive list, but a key person is basically anyone who provides a business with a direct and substantial economic gain.
A buy-sell life insurance agreement is a written agreement that sets out each business owner’s obligations when it comes to the transfer of business equity in the event one partner passes away or becomes permanently disabled.
Buy-sell agreements typically have two parts:
Those who own the business take out a buy-sell agreement. It ensures a smooth transition for the business should one partner be forced to leave, and means your business remains financially protected should something go wrong.
Business expenses insurance provides an ongoing monthly benefit to help you cover your fixed business expenses when you’re unable to work due to illness or injury.
Business expenses insurance is used to keep paying staff, clients and other regular bills until you’re back on your feet. It can be used to fund:
Business expenses insurance is generally available to businesses with less than five employees that produce an income. It’s a crucial consideration for many small and medium business owners to keep your business afloat if you’re temporarily unable to work.
Business life insurance covers a wide range of potential costs that result from a business owner passing away or becoming totally or temporarily disabled. It can kick in to help your business in the following ways:
The process for buying business life insurance is similar to taking out a personal life insurance policy. There are a few ways to go about buying coverage:
With business life insurance, your company is the beneficiary — which means the money will go back into the business if you die prematurely.
If you have financial dependents, debt or assets to protect, it’s a good idea to purchase a personal life insurance policy, too. That way, if you pass away, your loved ones can use the payout to cover living expenses, maintain their lifestyles, pay off any outstanding debts, and fund their retirement.
A personal policy can also add an extra layer of protection if you put up some of your assets as collateral to secure a business loan. Unfortunately, your debt doesn’t die with you, so a life insurance policy can ensure your family won’t lose their home or any other assets if you pass away.
Business life insurance offers coverage that can help keep your business afloat if you lose an owner or key member. Alongside a solid personal life insurance plan, it can help protect the business you’ve built and secure your employees’ and business partners’ financial future in the company.
Support your child’s financial knowledge and teach the important real-life money skills in a safe and controlled way with a kids’ debit card.
You can now calculate your payroll expenses based on gross income instead of net profit. Here’s how it works.
Don’t be fooled by false promises — here are red flags to watch out for and tips to find a legit company.
This insurer has four dental plans to choose from — compare costs and features now.
Compare options if you’re self-employed, a freelancer, a partner and more.
Learn cost-sharing terms to find out how much you’ll really pay for healthcare.
This fintech just branched out into low-cost life insurance — but its lineup is limited.
Get an incentive to meet your existing health and fitness goals with a discounted premium.
Find unusually low face values for a whole life policy, ideal for supplemental insurance.
Learn your policy options based on the type of transplant and your health status now.