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. However, life insurance may offer ways to protect your business financially 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 to help protect your business so it may continue to thrive in the future if a death were to occur.

Protect your business loans and lines of credit. With a life insurance policy, you may 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 may help offset these losses and help cover the recruiting and training expenses associated with finding a replacement.

Plan for the unexpected with a business succession plan. Should a business owner pass away, life insurance may be used as a tool to fund a buy-sell or stock-redemption agreement. It may 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 may 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 may 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 to help you financially protect your business.

This article is for informational purposes only and based on information that is widely available. We do not make any guarantees or promise any results based on this information. This article does not afford, offer, or guarantee any coverage.

This is a brief description of coverage and is subject to policy and/or rider terms and conditions, which may vary by state. Fixed and guaranteed premiums are statements about the policy as determined at issue, and any changes made to a policy may affect the premium and are subject to our underwriting rules. The words lifetime, lifelong and permanent are subject to policy terms and conditions.

Neither American Family Life Insurance Company nor its agents are authorized to give legal or estate planning advice, and this article should not be construed as such advice. Customers should consult an attorney or estate planner for answers to legal and estate planning questions.

 *Any loans taken from your life insurance policy will accrue interest. Any outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim or from the cash value at the time of surrender. If the loan balance grows too large for the cash value to support it, the policy could terminate.