For business owners, having life insurance is as good as having capital. It isn’t only aimed at future support for business owners; life insurance also gives you the liberty of getting a loan from your insurer. It is a great asset for all business owners to consider.
There are two basic kinds of life insurance policies: term and permanent. For the term life insurance policy, you choose the amount of money you want to be paid to your beneficiaries when you die. You can also choose the length, or term, of the policy. However, for permanent life insurance, the policy stays in place for the lifetime of the insured.
Getting life insurance in Nassau County, New York, is not as difficult as it seems. In this post, we’ll discuss the four major reasons why business owners should consider acquiring a life insurance policy.
4 Reasons Why You Need Life Insurance as a Business Owner
Accessibility to Policy Loans:
Life insurance earns cash value that accumulates over time due to interest earned and dividends paid. When a business owner incurs expenses, a policy loan can be obtained instead of paying high-interest rates to regular banks.
The policy loan amount can be equal to the amount of cash value in the policy. The capital is channeled back to the insurance company, so when the business owner pays up the loan, he or she can request another policy loan.
Unique Tax Benefits:
One of the great reasons to acquire life insurance for business owners is the unique tax benefits that can be availed. Tax-free retirement income, tax-free use of the growth in the cash value, and tax-free policy loans are just some of the benefits that come with life insurance.
Also, the insurance policy earns dividends and interest without tax. Even the death benefit is accompanied by significant tax advantages.
Income Replacement:
There are some cases where a business owner can’t work for a while due to illness or other circumstances. Life insurance can often be bundled with other types of protection, such as disability insurance, to replace a portion of your salary if you’re unable to work. This can help you meet your needs for that period until you can get back on your feet.
Paying off Debt:
When a business owner dies, their life insurance benefits can help pay off debt and cover expenses such as paying tuition fees or paying a mortgage. This gives the policy owner and the beneficiaries peace of mind. The business owner can rest easy, knowing that all their outstanding debts would be covered by the life insurance policy.
There are many life insurance policies relevant to business owners, such as policies that provide financial support to the entire business in case the owner dies and takes care of all liabilities. It is also highly recommended to get a joint policy for you and your spouse or a whole life policy that accumulates cash value over time, which can be used to reduce monthly premium costs later.
At Northeastern Group Limited, our team of experienced insurance professionals is readily available to help you get the right quote for you, your business, and your family. Reach out to us now to learn more about the policies that will give you the greatest protection.
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