There are several different reasons to own a life insurance policy either on yourself or someone else.  Let's take a look at what those reasons are.

Life insurance for Business Reasons


    
     
     Businesses very frequently insure key people that are employed by a business because of the financial loss that would be incurred by the business if that indivudal should die suddenly.  This is known as Key Person Life Insurance. 

     Businesses also often have more than one owner that owns a part of the business and should one of those partners predecease the others before the course of a normal buy out by the other partners, the life insurance is intended to generate the liquidity to buy out the partner who has predeceased the others.  This is accomplished by designating the other owners as beneficiaries in the case of an untimely death of the insured owner.  This is also a normal part of what is called a Buy-Sell Agreement.

Life Insurance for Personal Reasons



     Individuals buy life insurance for personal reasons.  Those personal reasons include the ongoing financial viability of running a family household.  What does that mean?  It means that if one or both of the breadwinners dies unexpectedly and there are family members that are dependent on the income that would then be lost; think children and non-working spouses, the life insurance proceeds pays for a place to live, food to eat, clothes to wear and other major expenses like sending kids to college.  In the life insurance industry this is referred to as Family Protection.  The life insurance proceeds can also be invested in a way that provides ongoing income for the remaining family.

     A second reason why an individual would insure their life is to provide Estate Liquidity.  Again, you may ask, what does this mean?  If you have a significant amount of wealth when you die, there could potentially be significant taxes due upon your death.  The beneficiaries of your estate would have to bear those estate taxes and a very common way of offering relief to the surviving beneficiaries is to use life insurance proceeds to create the liquidty required to pay for the estate taxes.  

   Regardless of your situation and what the need is for you to buy life insurance, we would like the opportunity to quote you the appropriate amount and type of insurance that would be suitable for your need. 

 
Life Insurance as a Tax Shelter

      
     Structured in the appropriate way, a life insurance polciy can be a very effective way of accumulating wealth in a tax efficient manner.