Although life insurance can be confusing for many business
owners, it is extremely important in times of need. A properly
designed life insurance policy can keep a family business
operating, pay the mortgage and estate taxes, and provide an income
for a spouse and family. A poorly designed life insurance policy
can add to the costs of the estate and result in extra estate taxes
or cause the insurance proceeds to be subject to creditors.
Therefore, you should review some of the important aspects of your
policy now, before your family is forced to do it for you.
The type of life insurance policy is not as important as the
amount of coverage. Many company owners buy their life insurance
coverage based on how much they can afford in premium and not by
using a formula.
The amount of coverage for an individual or officer of a company
can be determined by adding all debt obligations, mortgages,
expected income loss because of lost sales or job opportunities,
and any amount needed to fund income...
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