Some businesses depend heavily on one person whose knowledge, relationships, or leadership are difficult to replace. That person is often called a key person. Key person insurance can help the business manage the financial impact if that person dies. It may provide funds to help cover lost revenue, recruitment costs, transition expenses, or other short-term…
Some businesses purchase or own life insurance as part of a broader protection or continuity strategy. Before applying, business owners should understand the purpose, ownership, premium responsibilities, beneficiary, and intended use of the policy. Start by asking what risk the policy is meant to address. Is the goal to protect against the loss of a…
Key person insurance and buy-sell funding both involve life insurance and business planning, but they address different risks. Key person insurance is generally connected to the financial impact of losing an important employee, owner, or leader. The business may need funds to manage lost revenue, recruitment, transition costs, or other effects of that person’s death….
A family business can represent years of work, income, and identity. If something unexpected happens to a key owner or partner, the business may face financial pressure very quickly. Life insurance can sometimes help provide funds that support continuity during a transition. That might mean helping the business stay stable, giving the family time to…
A life insurance policy is more useful when the people who may need it know that it exists and understand where to find important information. You do not need to share every private financial detail with everyone. However, the appropriate family members should know that coverage exists, where policy documents are stored, and how to…
A stay-at-home parent may not receive a traditional paycheck, but the work they provide can have significant financial value. Child care, transportation, meal preparation, household management, and other responsibilities may need to be replaced if that parent dies. The surviving family may need to purchase services, reduce work hours, or make other changes. Life insurance…
Beneficiary designations can become complicated when a named beneficiary dies before the policyowner. The outcome may depend on the policy language, the type of beneficiary designation, and applicable law. Some policies include primary and contingent beneficiaries. A primary beneficiary is first in line to receive the proceeds, while a contingent beneficiary may receive them if…
When people discuss life insurance, they often focus on the death benefit and the beneficiaries. Ownership is another important part of the policy that deserves attention. The policyowner generally has important rights under the contract, such as making certain policy decisions, subject to the policy terms. The insured person is the person whose life is…
An irrevocable life insurance trust, often called an ILIT, is a legal structure that may be used in certain estate planning situations. In simple terms, it is a trust that can be used to hold life insurance outside of the insured person’s personal ownership, depending on how it is created and maintained. This type of…
Many employees receive some life insurance through work. Employer-sponsored coverage can be a valuable benefit, but it is important to understand exactly what the coverage provides and whether it is enough for your household. Start by reviewing the amount of coverage, the cost, the beneficiary designation, and any limitations in the plan documents. You should…