Term Life Insurance For Business owners

With entrepreneurship comes responsibility. The responsibility is first and foremost to your family who supported you to take on your endeavor, and secondly responsibility goes to your partners, employees, your bank, and your customers. For many business owners and self-employed people, especially in start-ups and the early years, you are the business. The success of the business is completely dependent on you being alive and going to work.  

Term insurance is an affordable insurance solution that is ideal for business owners wanting the most coverage for the lowest premiums.

Types of term insurance:

• Term 10 – the coverage stays level but the premiums increase every 10 years to age 80.  
• Term 20 – the coverage stays level but the premiums increase every 20 years to age 80.  
• Term 30 – the coverage stays level but the premiums increase after 30 years.  
• Term 65 – premiums stay level to age 65.  
• Term 100 – the premiums stay level to age 100.

The word “term” in term insurance means the length of time that the premiums stay level. When the premiums increase at the end of every term the renewal is automatic and no medical is required. The renewal is handled differently with different companies. For example, with ivari’s Term 10 insurance on the renewal the premiums increase and then are again level for the next 10 years. With Manulife’s Term 10 insurance when the policy renews in year 11 the premiums increase every year thereafter.

Term insurance is very affordable. For example:  

a male non-smoker age 35, 1-million dollars of coverage would cost 41.02 per month for the first 10 years.

A female non-smoker age 35, 1-million dollars of coverage would cost 32.45 per month for the first 10 years.

(these rates are correct on April 9, 2020)

A few things to know about term insurance:

For a business, term insurance premiums can be deducted as a business expense if:

• the policy is assigned to a restricted financial institution and
• the interest on the loan must be deductible and
• the assignment of the life insurance policy is required as collateral for the borrowing.

The term insurance policy can be owned by the company

Term life insurance is a good choose for a business if:

• The business is new
• The business has a bank loan – coverage can go to 20,000,000 if needed
• The business has a line of credit
• The business owner can protect his family by having a term insurance policy owned by his company
• You need to fund a buy-sell agreement

Life insurance is the only financial tool that produces cash on death. To determine the amount of life insurance coverage you need, it is important to know what the insurance is going to be used for. Once that is determined, we can help you shop the insurance market for the best term insurance rates among the leading companies we deal with.  

If you are self-employed and are looking to secure your family’s financial future, get in touch with us to discuss your options.