If a key employee of a business dies, the life insurance death benefit will allow the business to have choices while dealing with the loss. It can buy the business time and provide the resources needed to attract a replacement, pay expenses if there is a loss of revenue or even find a buyer for the business if that is what the owners chose.
Because life insurance death benefits play such a critical role in keeping families and businesses from poverty, the government has made them 100% income tax-free regardless of the type of policy you buy. Most of the time, term life insurance is the best solution as it provides the most death benefit protection per dollar of premium. However, permanent life insurance has additional benefits such as no loss provisions on their cash values, disability premium contributions and creditor protection. The premium requirements for permanent life insurance are higher than those of terms life insurance so it is important to understand how both of these impact your overall financial plan.
Decision Tree Financial is available at your convenience to help you navigate the process of buying life insurance. With our help you can be confident in knowing you are making the best decision for your life insurance plan.