4 Ways Life Insurance Can Protect Your Small Business

Setting up a business can be a risky move, especially for new entrepreneurs. This is where entrepreneurs should consider having life insurance that would protect their small businesses. 

Here are a few reasons why small businesses should have life insurance from Manila Bankers Life that is good for business:

1. Life insurance is an ideal place for business capital

Life insurance for small business owners has an advantage for it earns cash value. This cash value accumulates over time due to interest earned and dividends paid. When business expenses arise, the owner can use a policy loan, up to the amount of cash value in the policy, to cover business costs.

Capital is then funneled back to the insurance company so funds will be available again for future business expenses. Business owners can take out multiple policy loans year after year.

2. Life insurance can be used to attract and retain employees

A small business owner may incur a financial loss if a key employee dies, insurance companies generally let business owners have insurable interest over their employees. This gives business owners a very unique way to use business life insurance as an employee benefit. Life insurance may assign the employee’s estate as the beneficiary of the policy or they can list their business as the policy beneficiary.

3. Life insurance provides a business secession plan

Few businesses consider having a business succession plan. If a business partner passes away, often there aren’t finances in place to continue funding the business. Small business owners need life insurance if one or more of the business owners leaves the business due to different unfortunate circumstances.

Life insurance policies are for the duration of life, the business will collect on the death benefit when the departing owner dies, even if it is many years after they have retired or otherwise left the company.

4. Life insurance provides business owners with tax benefits

Small Business owners need whole Life insurance can help small business owners because it provides a place to grow wealth tax-free. With careful planning, distributions can also be taken tax-free.

The tax benefits of life insurance for business owners include tax-free retirement income, tax-free policy loans, and tax-free use of the growth of cash value. Plus, policies earn interest and dividends tax-free. The death benefit of a policy also has tax advantages.

Life insurance for small businesses is a smart and important asset that can be utilized due to its flexibility, growth, and security. Having life insurance should be one of your priorities.

Manila Bankers Life is here to help you to maximize the benefits of life insurance for your business.

For more information, please visit Manila Bankers Life’s website: https://manilabankerslife.com/products.html