How Small Businesses Benefit from Life Insurance

How Small Businesses Benefit from Life Insurance

Strategies on How Small Businesses Benefit from Life Insurance

Every day, as a small business owner, the decisions you make will affect many people in your life.  Developing a solid life insurance strategy will determine how your small business prospers.  Surprisingly, a valuable tool for owners in solving various business needs is through the proper use of life insurance.  For the following strategies, the focus will be on far more than the well-known death benefit. Indeed, you will see possibilities you have not considered.  Overall, life Insurance can help protect you, your family, and your business throughout your lifetime: Strategies such as:

Small Businesses are Benefiting from Life Insurance

More Successful with Life Insurance

  • Protecting the Key Person(s) in the business
  • Reducing your taxes
  • There are Living Benefits in life insurance
  • Cash value can help in managing cash flow
  • Cash value from insurance could enhance your retirement fund
  • It can help document your plan for business succession. Who takes over? How?
  • The death benefit can be used in a variety of ways

Previously, have you thought about any of these topics?

There are many more topics where life Insurance Strategies can apply, but today we want to point out that life insurance helps address all those topics. Finding their answers and implementing them is a cornerstone of many business plans. Let’s review how the strategies help diffuse conflict and even ensure an even transition in the event of a death.

Protect your business and your family! Secure their future financial stability with life insurance.

The 5 strategies on How Small Businesses Benefit from Life Insurance

Life Insurance Will Protect Your Small Business

One Way Small Businesses Benefit from Life Insurance

1] Small Business Benefits by Access to Capital

A percentage of every premium payment of yours will go towards the policy’s cash value.  As the business owner, this cash value is available to meet unexpected business expenses and even expansion efforts. It’s considered a loan, so when businesses pay back the cash value loan, those funds are available again for any additional unexpected expenses. In this way, life insurance policies can act as a source of very affordable financial capital, saving you from going elsewhere.

2] Life Insurance Will Protect Your Greatest Assets

If you have expensive industrial machinery or have invested in new buildings, it would be irresponsible to not insure them, right? But what about your most valuable asset: the employees. If your company’s top salesperson, head chef, or chief financial officer suddenly died, how much money would your company lose overnight? These key employees are the lifeblood of the business and need protection. Thus, we see another issue solved by life insurance.

3] “Tax Free” Capital Growth is Achieved with Life Insurance

Over the years, this life insurance strategy, the growth of the cash value in a life insurance policy is available tax free. This is significant as it allows life insurance policies to amass an internal rate of return that exceeds many taxable investment portfolios growing at a similar rate. 

4] Retirement Plans are Key Benefits of Utilizing Life Insurance

Many companies are already benefiting from using life insurance policies to provide retirement benefits to their employees. For example, companies often will help employees buy a life insurance policy in their name.  To compensate the employee, the company will pay them a ‘bonus’ equal to the premium payments and tax liabilities.

Beneficiaries Are Protected By Life InsuranceBeneficiaries Are Protected By Life Insurance

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The employee is then gains a life insurance plan that can supplement their retirement funds or cover other expenses.  If the employee dies, the value of the policy is paid to the family tax free. Increasingly, this is being used because it could be cheaper than other forms of retirement benefits. In addition, it can be used by small business owners to attract and keep top talent.

5] A Succession Plan – Key Person Coverage

Life insurance policies can provide a clear succession plan for businesses if one of the co-owners dies. In the event of an owner’s death, the remaining owners can use the death benefits to buy out the deceased owner’s share. These are known as “Key Person” policies. Life insurance can be a useful mechanism to ensure that the remaining owners will always have access to the necessary capital to buy out one owner’s share of the company and eliminate any prickly situations surrounding succession and the death of a co-owner.

If any of these topics are of interest to you, get the conversation started by calling or emailing me:

Keeping you informed…
Fred Fortson –
Focusing on Life & Health Plans for the Self-Employed & Individuals

(720) 489-0453 – National
(682) 500-1611 – Texas

Life Insurance & Health Plans
Licensed in Colorado, Arizona, Missouri, Nebraska, & Texas

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As a licensed Life & Health agent operating across the USA, Fred has built his reputation working with small businesses; individuals; and families.  The company,, is currently representing over 20 companies.

Using a digital business model, clients now stretch over multiple states. The digital tools used are meant to keep clients updated with information on how to effectively use their health or life plans; how the changes in healthcare can impact them; alerts of new plans available that are directed at reducing their costs; even made aware of current trends that may have negative economic impact.