Update Sept. 02 - 2010 All About "Business Life Insurance" Information By Insurance Experts

It is important that people own a business understand what is business insurance, so they can protect their business in case of any unforeseen event happened causing hardship to the business owner and their family such as business store burned down one day, if you don't carry insurance, you would endured some hard times after that. You make sure you have insurance for anything importance, or anything that could prevent you from earning a living.

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What Happens If My Life Insurance Company Goes Out of Business?
By Ed Hinerman

Fair question - since over the past ten years we have seen some shocking things happen in business. Highly rated, highly respected companies biting the dust. What about Enron? Not an insurance company, but poor management of a large trusted company.
So, what if it had been an insurance company? What if it had been a life insurance company where you happened to have all of your family protection? What if it happened to be the company that had sworn it would fend off disaster for your family if you were to die prematurely? Enron just disappeared. Poof! Gone! Is that the same thing that happens when an insurance company goes under?
The good new is the answer is no. There really isn't any way to compare Enron with, say, Empire General went out of business a few years ago. A lot of my clients had policies with them so I got a lot of calls about what was going to happen. The truth is that Protective Life picked up their entire block of business and kept it intact, didn't change any of the terms (they couldn't by law) and those policies are fully in force today.
Maybe that wasn't a fair example because Empire General was part of the Protective Life Group to start with. But the same held true for Federal Kemper when they were purchased by Zurich, Zurich when they were purchased by Chase, MONY and US Financial when they were purchased by AXA Equitable and Travelers when they were purchased by Met Life.
With insurance companies the block of business has value because of the cash flow from premiums. I guess there should be some distinction drawn here between term insurance and non guaranteed cash value policies. With term insurance there aren't any moving parts. Premium and death benefit. If another company is looking at buying a block of business, a lack of moving parts, bells and whistles is a good thing.
With cash value policies, and specifically cash value policies that are not fully guaranteed, I think some concern about what happens if the company goes under is warranted. While it is as close to an absolute that the block of business will be purchased if it is all fully guaranteed policies, I honestly can't think of a reason that a company would buy a block of non guaranteed business unless the downside on that part of the business was dwarfed by the upside on the guaranteed portion.
Bottom line. If you have a guaranteed level term policy I wouldn't worry about your company. The only thing that will change if they go out of business is who you make the premium check to. By law everything else, the premium, term length and death benefit, has to remain the same.
If you have a variable universal life, or a universal life or whole life policy that is dependent on assumptions and not guarantees, I would switch to something fully guaranteed before you have to find out if it will survive your company's demise.
About The AuthorEd Hinerman has focused his attention and made it his priority to help people with health issues get life insurance they can afford. Visit http://www.hinermangroup.com for more information.
Ed blogs about his insights and tips on life insurance here http://www.hinermangroup.com/blog

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Article Source: http://EzineArticles.com/?expert=Ed_Hinerman

Update August 19 - 2010 All About "Business Life Insurance" Information By Insurance Experts

It is important that people own a business understand what is business insurance, so they can protect their business in case of any unforeseen event happened causing hardship to the business owner and their family such as business store burned down one day, if you don't carry insurance, you would endured some hard times after that. You make sure you have insurance for anything importance, or anything that could prevent you from earning a living.

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How Key Man-Key Person Life Insurance Can Help Save Your Business
By David Goldenzweig

What is Key Man Life Insurance (also known as Key Person Life Insurance)?

Most companies employ at least one person who represents the key to the success of the business (often the owner of the company). The loss or death of that person could deal a real blow to the company and its ability to generate revenues to survive - someone else must be hired to carry on the same tasks performed earlier, and that expense, in addition to the loss of revenue, must be reconciled. Many owners therefore insist on buying life insurance to minimize the risk, and many lenders require that the business carry key person life insurance to protect their loans and investments into the company.

How does it work?

The key person must agree to the purchase of insurance on his/her life. The business typically owns the policy, pays the premiums and remains the beneficiary. The policy can be transferred to the employee if he/she leaves the company, or can be retained if the company is sold - the new purchasers may want to keep the insurance in recognition of the outstanding loans that may be secured to buy the interests of the insured.

Are there other reasons to have Key Man Life Insurance?

Key person policies are often used as well to support a buy-sell agreement between business partners. The proceeds can be structured to purchase the deceased person's shares or interests in the company. The agreement mandates that the deceased executive's estate sell its stock to the remaining partners/shareholders, and that the partners/shareholders purchase the interest for a specified price. The price should help establish the value of the business for estate planning purposes and calculating the estate tax upon death.

David M. Goldenzweig Goldenzweig Financial Group Haymarket, Virginia 20169 Toll-Free 1-877-656-1436 E-mail david@terminsurancebrokers.com Website - http://www.terminsurancebrokers.com Corporate and Personal Life and Health Insurance Life - Disability - Long Term Care - Employee Benefits Recommended Reading Insiders Tips For Reducing Spending Money Saving Tips And Ideas Covers Practically All Areas Of Household And Modern Living Expenditure Back To Insurance Contents Back To General Contents ( Home ) Back To The Top Article Source: http://EzineArticles.com/?expert=David_Goldenzweig

Update August 02 - 2010 All About "Business Life Insurance" Information By Insurance Experts

It is important that people own a business understand what is business insurance, so they can protect their business in case of any unforeseen event happened causing hardship to the business owner and their family such as business store burned down one day, if you don't carry insurance, you would endured some hard times after that. You make sure you have insurance for anything importance, or anything that could prevent you from earning a living.

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The Role of Life Insurance in Family Business Succession
By Barry Milton

You've worked long and hard to build a business. You are now at a point where retirement isn't that far off and the idea of leaving the business to your kids is attractive. Even better, they are interested in taking it over. Now all you have to do is figure out how to deal with the succession process. Life insurance will pay a big role.

Mention the name IRS and nearly everyone will start grumbling. Unless you've gone through a "super audit", you haven't experienced anything even close to dealing with the agency on a business transfer after an owner has passed on.

The agency isn't really at fault. The tax code written by Congress is the problem. It calls for estate and gift taxes to be paid on the passing of an individual for any transfers made to heirs excluding the spouse. Put in English, this means there are going to be tax ramifications for transferring the business to your kids. Big taxes.

Even better, the payment of taxes is due nine months after the passing of the person in question. That might not sound too bad, but think it through. A business is an illiquid asset. How do you come up with a huge chunk of change for something that might make a lot of money, but is itself rather intangible? You can't. This is the reason the Los Angeles Dodgers were sold by the O'Malleys and the Miami Dolphins were sold by Joe Robbie's heirs. There was no other way to come up with the tax bill.

Most of us don't have businesses that are worth hundreds of millions of dollars. A business worth $5 million or so might not be as glamorous, but it is a lot easier to transfer. One way to come up with the cash to pay taxes is life insurance. The policy is taken out on the life of the owner. When they pass, the insurance company pays out a large sum that can be used to pay the taxes. The life insurance has to be positioned correctly in an overall estate plan, but it can be the key to keeping a business in the greater family instead of selling it in a panic to pay the IRS.

Ultimately, that is what you want right?

Barry Milton writes about succession planning and other financial planning subjects for UFCAmerica.com.

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Update July 16 - 2010 All About "Business Life Insurance" Information By Insurance Experts

It is important that people own a business understand what is business insurance, so they can protect their business in case of any unforeseen event happened causing hardship to the business owner and their family such as business store burned down one day, if you don't carry insurance, you would endured some hard times after that. You make sure you have insurance for anything importance, or anything that could prevent you from earning a living.

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Is Inheritance Tax Due on Life Insurance Payouts?
By Marilyn Katz


Are Life Insurance Death Benefits Tax Free?
Actually, one of the big advantages of leaving money in the form of a life insurance benefit, is the fact that the US IRS grants it a very favorable tax treatment to these proceeds. Let me start off by admitting that I am not a tax professional. That is why I consulted the IRS website to get the full story on how death benefits would impact a beneficiary when they need to fill out their tax forms.
According to IRS.gov, the website that is run by the US Internal Revenue Service, you are not liable for insurance death benefits as a taxable expense, unless you purchased that benefit for money. This is true, even if those benefits were paid out by some type of accident or health insurance plan. You may, however, be liable for any growth to that death benefit.
Life Settlement Investors Must Pay Taxes
How do you purchase these benefits for money? These days, there is a transaction called a life settlement. In these, an investor actually purchase life insurance policies as an investment. The insured person gets a cash settlement which is somewhat lower than the actual death benefit. The investor becomes the new owner and beneficiary, and they hope to profit when they finally collect the proceeds.
So this is the exception, but otherwise, the IRS declare that life insurance proceeds are a tax free benefit. Again, that is why life policies are popular ways to leave an estate. It relieves the heirs, in many cases, of having to declare the money they get on their taxes.
Proceeds Are Tax Free, But Gains Are Not
Keep in mind, that the tax advantages only apply to the actual death benefit. If any gains are made on the money, these can be taxed. It is common for life insurance benefits to be paid out over time, and for the cash in the account to build up at a specified interest or market index rate. Another example might be a cash value policy that has actually accumulated a greater cash value than the death benefit. This growth may very well be taxable. So the tax advantage is limited to the actual amount of the death benefit.
Again, if you are unclear about the distinction, it is time to consult with a qualified tax professional.
Uses For Life Insurance Policies with Tax Free Death Benefits
People have a variety of uses for these policies because they provide a simple and tax advantaged way to leave an estate.
Leave money to children or grandchildren. Because of the reduced tax liability, this may be one of the best solutions for passing an estate on to the next generation.
Leave money to a favorite charity.
Compensate some heirs because a business will be passed on to only one heir. If Grandpa is only going to pass his bakery on to one son who has trained to be a baker, he can leave money to his two daughters to compensate them. This can be a fair way to avoid family disputes.
Compensate a family if a business partner will continue to own a business. Some partnerships purchase life insurance so that the surviving partner can continue the business. Meanwhile, the other partner's family can get compensated or bought out with the proceeds from a life insurance policy.Would You Like To Shop For Life Insurance?
If you think that a policy would help you plan for the future, it may be time to compare quotes and policies that meet your needs.
Can we help you find over 50s life insurance to help you protect your estate?
We would like to make it simple and quick for you to do life insurance comparisons with our fast, free quote forms.

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Update June 26 - 2010 All About "Business Life Insurance" Information By Insurance Experts

It is important that people own a business understand what is business insurance, so they can protect their business in case of any unforeseen event happened causing hardship to the business owner and their family such as business store burned down one day, if you don't carry insurance, you would endured some hard times after that. You make sure you have insurance for anything importance, or anything that could prevent you from earning a living.

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Secure Your Life and Business Through a Corporate Insurance Company

By Mark John Daniel

Life is something which has to come to an end at certain point of time and no one knows when the time may come. Sometimes due to certain misfortune death can come all of a sudden. And likewise there is a great risk in running a business. Sometimes business may suffer a great loss due to sudden death of a key employee. And it is for these reason insurance of not only life is necessary but even business and many other products are equally important in order to repay any loss.

To get full security in life you can now have a golden opportunity to insure yourself as well as your home, pet, car, even business and all that can cause danger and make you fall in some kind of difficulty. A corporate insurance company is the best option for all in order to get full insurance for yourself and your personal property. Just what you have to do is select a policy according to your choice because corporate life insurance gives you the opportunity to get insurance starting from life insurance, to all types of insurance even automobile insurance.

Travel for many of us is a hobby where one has the urge to visit beautiful places but before you travel you must feel secured from inside your heart because no one knows what will happen tomorrow so it's better to buy travel insurance. Through travel insurance you will get different kinds of benefits that can make your travel easy as well as safe. While you are travelling and your car gets damaged due to accidents on the roads then your headache of getting your car repaired will be minimized through car insurance and more over if anybody gets injured by your car then if you have car insurance, it would be beneficial on your part because car insurance can help you to come out from the troublesome situation and give you relief from any kind of stress or tensions.

Today you can get different kinds of health insurance policies which can insure your health and protect you from any kind of troublesome situation. Your health insurance policy can give you coverage for the time when you want treatment for a particular disease i.e. all kinds of financial help in order to continue your treatment in the best possible way and this can make your family members to get relief from any kind of stress or tension. So your life, health and personal property are solely yours and it is you who can protect your asset through a corporate insurance company.

Compete Infotech - an online business promotion company with highly experienced SEO professionals and marketing stuffs for sites offering seo services. We are marketing agents for http://www.corporateinsurancecompany.com, provides the information of corporate insurance and services.

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Update June 06 - 2010 All About "Business Life Insurance" Information By Insurance Experts

It is important that people own a business understand what is business insurance, so they can protect their business in case of any unforeseen event happened causing hardship to the business owner and their family such as business store burned down one day, if you don't carry insurance, you would endured some hard times after that. You make sure you have insurance for anything importance, or anything that could prevent you from earning a living.

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Key Man Life Insurance - Your Business is at Risk Without It

By Lorraine Benham

Key man life insurance will really help you keep your business going if you are faced with the death of a crucial employee central to the running of your company. Most employees can be replaced but often not quickly. When you have this type of insurance you have the funds to hire part time replacement staff or to add to the package you are offering to entice a comparable person into joining your business team.

Why is it needed?

Think of this scenario: your company builds custom designed yachts. You are lucky enough to have snagged one of the top half dozen yacht designers in America as your chief designer. Then he has a completely unexpected heart attack and dies. Your company is suddenly without its biggest drawcard. If you hold a key man life policy on this employee there are a range of ways in which those funds can be used to help you look after your business interests.

One of the major consequences of losing a key employee may be a buyout by an existing partner or the need to close a business down. Having funds readily available to spend on transitioning your business from how it has operated prior to the death to what is now required, is very useful. This is a major argument in favour of key man life policies.

If a company is large, investors need to have their interests protected in the event of a key employee dying. A key man life policy is a simple and straightforward way to safeguard those interests. It works by making sure the ongoing effective operation of the business is ensured if the policy adequately covers the impact of replacing and training a replacement employee.

What are the choices about what type key man insurance you take out?

There are different types of key man life policies available. One type is the standard whole life policy in which the value of the premiums paid accrues over time. Another type is a term life policy which has cheaper premiums and covers a key employee for a specific period of time but the value of those premiums does not accrue.

Whole life key man life policies do have specific advantages. As they have an accumulating cash value they give the business a handy line of credit or an asset against which a loan can be drawn. They can also be cashed out or the value of the policy sold to the insured person when they retire.

A term key man life policy is definitely cheaper than a whole life key man life policy. This makes them perfect for smaller businesses who want coverage without a high premium. They will get necessary funds if a key man dies but if that does not occur they are not paying too high a price to cover the risk of losing a key employee.

key man life insurance is held by the business that takes it out. The business pays the premium on the policy and the business is the beneficiary of the policy. This is because it is the business which is in need of funds if it has to cope with the death of a key employee. That key employee may have held a life policy in his own right, but that is an entirely separate matter. As with all insurance, make sure you get a quote from a reputable insurance company before proceeding.

For Which Life Insurance, information that's clear and useful and for FREE QUOTES on all Life Insurance, click here www.bestlifeinsuranceavailable.com

If you have a big need for straightforward, non technical descriptions of different types of Life Insurance before getting a quote, I've collected all the information you need.. Here's what I found out about Keyman Life Insurance, Lorraine Benham

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Update May 18 - 2010 All About "Business Life Insurance" Information By Insurance Experts

It is important that people own a business understand what is business insurance, so they can protect their business in case of any unforeseen event happened causing hardship to the business owner and their family such as business store burned down one day, if you don't carry insurance, you would endured some hard times after that. You make sure you have insurance for anything importance, or anything that could prevent you from earning a living.

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5 Reasons Businesses Buy Life Insurance

By Robert C Eldridge Jr

Life insurance can be used by business to accomplish a lot of different needs. I will go over some of the popular uses and why businesses buy the life insurance.

Death and Losses

After a business owner dies, there may remain massive losses to the business as the owner might not only run the business but the owner also has relationships with people that can hurt the company financial after their death.

Collateral

A permanent life insurance policy with cash value may be used as collateral for a loan. What better way to secure a loan with an insurance policy with cash value. You can walk over to your nearest bank and ask the banker how much you can get for your policy. Life insurance policies are an asset class.

Retirement Plans

Some business owners purchase insurance policies and fund their policies as a way to use the cash value for future retirement needs. These policies will grow tax deferred and will taxed until you withdrawal the funds.

Buy-out

These insurance policies can be a great way to buy a partner out when someone wants to retire or to take control and acquire a greater percentage of the business. A buy out is a great way to buy out the interest of a business when the other partner dies. The funds can then be used to usually buy out the spouse of the other owner.

Key-Man

Key man or Key Employee insurance allows a business to buy insurance on a key employee and cover the cost of losing that employee. The loss of a key person to a business can have significant financial effects on the business. The business can now protect its financial interest in those employees who are important to the business.

Click the link below in the resource box to find out more about Business Life Insurance.

Visit http://www.annuitycampus.com for more information on Business Life Insurance.

Robert holds over a decade of experience as a multiline agent in multiple states and currently serves on the membership council of the National Association of Insurance and Financial Advisors.

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