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4 Ways Life Insurance Can Save Your Business

4 Ways Life Insurance Can Save Your Business

Did you know that the majority of people who own a life insurance policy receive it from their employer, rather than own their personal policy?

108 million people were covered by an employer plan, as opposed to the 102 million covered by a policy the personally own, according to a 2017 LIMRA study. 

That’s great news for W2 employees, but what about the rest of us self-employed, entrepreneurs, and retired folks?

There are many uses of life insurance that we may not even know about, until we start to educate ourselves and learn about the types of coverage available to help us plan and prepare for the future.

Business Owners Know that Life Insurance is an Incentive and an Asset for Businesses of All Sizes

It’s been my experience as an Insurance Professional that people underestimate the value and flexibility Life Insurance provides business owners, entrepreneurs, and their families.  

A life insurance policy can be used as collateral for a loan

When taking out a business or a personal loan. A life insurance policy is considered to be an asset to most lenders. We would be happy to share with you all the ways that taking out a life insurance policy could increase your chances of getting a loan, and securing a good interest rate. You can reach us on the phone today.

Life insurance policies and be included in a retirement plan

When building out a retirement plan for a valued employee, it is a wonderful and very valuable gift, to give the gift of Life Insurance. If you understand the value of providing security for your employees family, then this gift is something that might appeal to you.

A policy can be a reward or incentive for a highly valued employee

In many businesses, your managerial and sales staff are fundamental to the growth and sustenance of a company. At Ruth Stroup Insurance we understand that, and we are here to help you value the people you depend on the most.

A policy can provide much needed capital after the death of an owner or key employee.

There are many ways that having a Life Insurance Policy for a key employee or owner can be the most important way to secure a business. This is a little-known fact, but it is also a critical way to support your business, and keep it secure for future changes.

Case Study: Life Insurance with Spouse Beneficiary

Recently, I met with a business owner whose partner had passed away in the prior year.  Both partners had made significant investments in their company, and both had company paid life insurance.  

Both named their spouse as beneficiary of their life insurance policy.  Let’s call this the Employee Benefit approach.

Neither policy named the business as a beneficiary – what we call the Key Man (or Woman!) approach.

The surviving business partner was really struggling to manage the business!

In the past, the partners had divided the workload based on interest and expertise.  And the remaining owner had to get up to speed and make a number of really difficult decisions to prevent the business from going bankrupt.   

A life insurance benefit to the business would have provided the business with time to reorganize and give both partners families a more secure financial future.

Since these business owners had life insurance policies that paid out their spouses and did not pay out to the business, it created a situation of insecurity and instability. A situation that could have been averted.

In My Experience Business Owners Who Understand the Multiple Uses of Life Insurance Policies Secure Their Businesses for the Future

Over the over ten years I have been privileged to work as an insurance agent, I’ve come across stories that were just the opposite.  

Owners who had robust life insurance programs that provided for both the business and the family.  

These business owners build businesses that thrive, and can be passed on to the next generation.

It is a privilege for us to serve the community, and help your business ensures that it is strong and viable for a long time into the future.

Call us today, so that we can share with you the many uses of Life Insurance Policies, and how you can make your business more secure today.

Ruth Stroup
Ruth Stroup
The Insurance Lady!
As your local Farmers® agent in Oakland, CA, we are located near beautiful Lake Merritt in the Grand Avenue business district. When not in the office you can find me walking the lake or shopping at the farmers market. I love educating people about how insurance works, and how to make it work for them --whether that's auto, life, financial services, home, renters, business insurance and more. We help people get the right insurance and financial services at a fair price. We start with a needs assessment, recommend coverage, and then we pursue discounts and deductibles. You don't skimp on service or decrease your policy limits to get a good price. Let me show you how...

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