With key employee insurance, the business is given a financial buffer so that a replacement can be found. Some businesses are owned by a few stockholders whom control the business. A buy-sell agreement is a legal document giving the right of purchase of the deceased shares to the remaining shareholders. Many businesses opt for a Life Insurance policy to fund the purchase of these shares. Insurance Permanent plans including Universal Life, Whole Life and Adjustable Life are designed to give clients life insurance coverage that can last throughout the policy- holders life.
Policyholders pay a higher premium in the first few years.
Portions of the premiums being paid into the policy accumulate in an account earning tax-deferred interest. Term plans offer life insurance for a certain number of years. Term insurance is typically less expensive than permanent coverage. Although term insurance can initially be less expensive, it may not be the most economic choice in the long term. Every client has a different financial situation and financial need.