What is Business Life Insurance - Buy-Sell Agreement Salt Lake City - IHP Advisors

Businesses use life insurance in a variety of important ways. For example, life insurance is the preferred method of funding buy-sell agreements. It is also a major component of many employee benefit programs, both group plans and special carve-out plans for highly compensated employees. Life insurance taken on the life of a key employee can provide cash to finance any losses and expenses that result from the individual's sudden death.

Also, life insurance provides a secure source of funding for a company's qualified and nonqualified retirement plans. Life insurance can also be used to guarantee repayment of a business loan, allowing an owner to obtain financing for a new or expanding business.

Using life insurance for business purposes can have significant tax consequences. It's important to understand the issues up front
and to structure the arrangements so as to minimize or eliminate the tax impact.

Here are some of the uses for Business Life Insurance:
- Funding buy-sell agreements
- Providing an employee benefit
- Split-dollar - including nonqualified deferred compensation plans
- Insuring a key employee
- Guaranteeing a business loan

Investment vehicles such as life insurance do come with risks Always consult a CPA or tax professional before making any investments.
Information provided is for educational purposes only and shouldn’t be viewed as a recommendation to buy or sell any particular financial product or service. Depending on your individual situation, discussions presented may not be appropriate.