Business-Owned Life Insurance: Questions to Ask Before Applying
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, support a buy-sell arrangement, or provide another form of business protection? A clear purpose can make the rest of the conversation easier.
It is also important to identify who will own the policy, who will pay the premiums, and who may receive the proceeds. These decisions can have legal and tax implications. This is not legal or tax advice. Consult a competent attorney and a competent tax professional before implementing a business-owned policy arrangement.
Business owners should also keep records of the policy and review the arrangement when ownership, personnel, or business goals change.
The right questions should come before the application—not after a problem arises.
Book a call with us to discuss the insurance questions your business should answer before applying.
Request our free Business-Owned Life Insurance Question List to help prepare for conversations with your advisors.
