There are two different types of life insurance you need for your business. Key Man insurance is needed on the “key” people behind the company’s success – owners, founders, or top employees. A Buy-Sell Agreement is needed in any business, no matter that size, to know how to handle (and avoid) financial and tax problems in the event the owner dies, can’t work anymore, divorce, bankruptcy, sale or retirement. While Buy-Sell Agreements are vital for businesses with more than one owner, all businesses should consider it to prevent inner-family turmoil and the business’ collapse.

• Key Man Insurance – Covers the monetary loss when the insured individual is not able to work or run the business. This policy also covers losses associated with hiring temporary employees, recruiting and employees training, compensating lost sales, and any guaranteed business loans.
• Buy-Sell Agreement – Allows the business to continue in the event of a partial-owner’s death, retirement, or exit from the business. The agreement details the price the other business owner(s) will pay to purchase the departing owner’s percentage of the business. The policy’s death benefits go toward the purchase price.