Life Insurance

Life Insurance for Business Owners and Executives

For business owners and executives, life insurance isn’t just a personal financial planning tool. It’s a business asset—used to fund buy-sell agreements, protect against the loss of a key employee, and structure executive compensation packages that retain top talent. We handle both sides of that equation: personal protection and business continuity planning.

Personal Life Insurance

The basics first. If you have dependents, debt, or anyone who relies on your income, you need life insurance. The question is what type, how much, and how you structure it to work with the rest of your financial picture.

Term Life Insurance

Straightforward coverage for a defined period—10, 20, or 30 years. Typically the most cost-effective way to get a significant death benefit. Good for income replacement, mortgage coverage, or covering business obligations during a growth phase. Term rates have come down significantly in recent years, making longer-term protection affordable for most people.

Whole Life Insurance

Permanent coverage with a guaranteed death benefit and a cash value component that grows over time. More expensive than term, but the cash value is an asset you own and can borrow against or access. Whole life makes sense when you have permanent needs or want a policy that never expires.

Universal Life & Variable Universal Life

Flexible premiums and adjustable death benefits. More complex than term, but useful for business planning scenarios where coverage needs may change. UL policies require active monitoring to stay in force, but the flexibility can be valuable.

Life Insurance for Business Owners

Key Person Insurance

If your business has one or two people whose loss would seriously disrupt operations—the rainmaker, the lead engineer, the founder—key person insurance pays the company directly when that person dies. It gives the business time to recruit, reorganize, or wind down without a financial crisis on top of an already difficult situation. The business owns the policy and is the beneficiary. This is straightforward life insurance structured for business purposes.

Buy-Sell Agreement Funding

If you have a business partner, what happens to the business when one of you dies? A buy-sell agreement defines it. Life insurance is the most common way to fund that agreement—the surviving partner uses the death benefit to buy out the deceased partner’s interest, typically from the estate. We work closely with your attorney on the structure (cross-purchase vs. entity purchase), handle the insurance side, and make sure the funding amount stays in sync with the business valuation as your company grows.

Executive Bonus Plans (Section 162)

Using life insurance to structure executive compensation has real advantages—it’s flexible, tax-efficient in the right structure, and creates a retention hook that 401(k) matches don’t. A Section 162 executive bonus plan lets you give a key executive a bonus, they use it to buy life insurance, the company retains ownership, and the cash value becomes an asset. These aren’t right for every situation, and we’ll tell you when they don’t make sense. But when structured properly, they can be powerful retention tools.

Corporate-Owned Life Insurance (COLI)

The company owns and pays premiums on life insurance covering key executives or owners. At death, the company receives the benefit. Similar concept to key person insurance but often used for larger executive protection and wealth accumulation for the business. COLI requires careful design to avoid issues with policy contestability and other technical rules.

Estate Planning & Life Insurance

For high-net-worth business owners, life insurance plays a critical role in estate planning. A properly structured policy can cover estate taxes, equalize inheritances between business and non-business heirs, or fund a charitable intent. We work with your estate planning attorney to make sure your life insurance strategy supports your overall goals.

Our Approach to Life Insurance

Life insurance is sold aggressively and often oversold. We don’t work on commission pressure. We do a needs analysis first—figure out what problem you’re actually solving—and then find coverage that fits. If you already have personal coverage that’s adequate, we’ll tell you that rather than trying to replace it. Our job is to make sure you’re neither under-protected nor over-insured.

We work with multiple carriers, which matters significantly in life insurance. Underwriting varies substantially between companies—your age, health history, occupation, and the type of coverage you want all affect who prices it best for your situation. We manage the underwriting process, advocate for the best rate class, and shop informally for complex cases before you complete a full application.

For business-related policies, we also coordinate with your legal and tax advisors to make sure the policy design supports your business structure and achieves your stated objectives.

Frequently Asked Questions

How much life insurance do I need?

A common rule of thumb is 10x your income, but that’s a starting point, not a plan. For personal coverage, the right number depends on your debts, your family’s lifestyle needs, and what your family would need to achieve financial independence. For business owners, the right number also depends on buyout obligations, what business debts survive you, and what your surviving partners or heirs need to keep the business running. We build a number from actual inputs, not a formula.

I’m in decent health but not perfect. Will I qualify for the rates advertised?

Probably not at the absolute best rates, but you’ll likely qualify for solid coverage at reasonable pricing. Underwriting outcomes vary significantly by carrier—we know which carriers underwrite your specific health history favorably. For complex health situations, we can shop informally before you complete a full application so you know what to expect.

When does term vs. permanent make more sense?

Term when you have a defined obligation with a time horizon: mortgage, children’s education, business loan repayment, buy-sell obligation with a retirement date. Permanent when the need is indefinite or when there’s a business or estate planning purpose that goes beyond simple income replacement. Most people need some of both.

If I have life insurance through my employer, do I need personal coverage too?

Almost certainly. Employer-provided life insurance usually covers 1-2x salary, which is rarely enough for actual family needs. It also goes away if you leave the employer. We recommend personal coverage as your foundation and employer coverage as a bonus on top.

Can I use life insurance as an investment?

Whole life and universal life policies do build cash value, but life insurance is a life insurance product first and an investment second. The returns are modest compared to market investments. If you’re looking to invest, invest. If you need life insurance protection, get the protection and don’t over-complicate it with cash value.

What happens to my business life insurance policy if I sell the business?

That depends on the policy type and what you do with the business. Key person insurance typically terminates or is converted when the person leaves. Buy-sell insurance transfers its ownership according to your buy-sell agreement. We help you plan for life events like this so there are no surprises.

Let’s Discuss Your Life Insurance Needs

Life insurance decisions are personal and often complex when business is involved. We approach each situation individually, without sales pressure or oversimplification. If you’re a business owner, an executive, or anyone with dependents or debt, let’s talk about whether your current coverage—or lack thereof—makes sense for your situation.

Explore Our Other Services:

Employee Benefits | Commercial Insurance | Professional Liability | Workers Compensation