Business Planning & Succession: Life Insurance Can Support Your Business Operation & Your Future
Business based life insurance is often used to support operations as well as buy-sell agreements and other related bylaws or operating agreement provisions. Business life insurance can support your business financially if something happens to you, your other members or partners. There are several different types of life insurance that fall under the umbrella term of ‘business life insurance’ and provide the coverage you or your operating entity need to protect the business as well as your heirs. As to the amount of life insurance, many planners recommend an amount 10 times or more than your current income or an amount that comports with the business valuation. This can be reviewed, assessed and adjusted annually as needed. Life insurance rates are influenced by a number of factors to include your age and health, which has the biggest impact on the policy and premium costs. To protect your business and interest with life insurance, consider the ongoing operations, status, bylaws or operating agreement terms, conditions and provisions to decide as to payment of the death benefit and to chose beneficiaries, such as the entity, other LLC members, or your family, where your loved ones may also count on the death benefit to support them, and where you can choose multiple beneficiaries as needed. Contact al of your trusted advisers to include your attorney to address this business matter.
DiMedio Law is a New Jersey law firm whose practice includes Business Services & Succession Planning and related Real Estate and other matters to include Estate Planning & Administration. Contact us at [email protected] or call us at 856-428-5577.
DISCLAIMER: This advisory is for general information purposes only. It does not constitute legal advice, and may not be used and relied upon as a substitute for legal advice regarding a specific legal issue or problem. Advice should be obtained from a qualified attorney licensed to practice in the jurisdiction where that advice is sought.