All About Business Protection Life Insurance: 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 of importance, or anything that could prevent me from earning a living. In fact, business insurance helps people who own businesses to protect the viability of the business and themselves, so they invest in business insurance. The protection of business insurance involved their assets is primary and the guarantee of a business to carry on is a close second. It also is an extension of the protection of the family interest , as such, as a convenience for the Underwriter to tackle the inherent problems.
Business insurance usually falls into one of three categories:
1. A Buy and Sell Agreement between partners or shareholders that make sure that the survivor(s) to carry on after death of the owner or one of the owners

2. Recovery of loss of income in the event of business interruption due to the death of one of the owners. In most instances, it would be wise to insure the human life values as it would be to insure the physical assets.

3. Insurance to protect the employees and their dependents from the financial hardship that can be created at death, disability and retirement.

Business insurance also helps to

1. Transfer ownership upon death of an owner to a new owner, a partner or another shareholder(s) in the event of death or retirement.

2. Insure key persons – Often success of a business rests on the shoulders of one or more very talented employees. These vital components of the business should be insured in the event of their death or disability to ensure the business will continue successfully.
3. Provide coverage for a most important assets of business – its employees ( By Kyle J. Norton )

Ordinary Business Life Insurance
By Sarah Martin Platinum Quality Author

The ordinary business Metropolitan Life Insurance Company prospered anew soon after 1892. This new lease on life was due not only to the low cost of the contracts, but also, in large measure, to the wide variety of plans available and to the many liberal features Mr. Fiske had incorporated in the policies.

During 1892, 1,704 ordinary policies were written for approximately $2,000,000, as compared with 178 policies for less than $200,000 the year before. The ordinary insurance on the books jumped rapidly from approximately $5,300,000 in 1892, to almost 10 times that sum only five years later. Before the turn of the century more than $110,000,000 of such business was in force, representing close to 125,000 policies.

Whereas in 1891 the Metropolitan Life Insurance Company was at the bottom of the list of ordinary companies operating in New York, it had reached fourth place as regards business written in this Department by 1900. After the Armstrong investigation the company forged ahead at an even more rapid pace, narrowing the margin between itself and the older, larger companies. Between 1906 and 1913 the ordinary business in force gained $609,905,310.

In the same period the New York Life gained $243,493,494; The Mutual $81,208,898; the Equitable $94,417,206. The Metropolitan thus gained nearly 50% more than all these three combined. Only a decade later, in 1923, the Metropolitan had become the largest ordinary insurance company in the world as well as the largest in total insurance in force. This standing, moreover, had been achieved without general agents or salespeople other than the men who represented the company on the so called industrial "debits," that is, the territory which each agent serves.

Shortly after the ordinary business was reestablished and the company's agents began to canvass for this type of insurance, they found that a considerable number of working people were able to pay premiums quarterly, but could not afford to buy insurance in sums as large as $1,000, the minimum amount for ordinary. To provide this group with protection, the company in July 1896 began to issue intermediate insurance, i.e., policies for $500, with premiums payable annually, semiannually, or quarterly.

It is not surprising that the Metropolitan should have pioneered in this field, since it has always blazed trails in bringing insurance protection to the lower income groups, such as no medical exam term life insurance. This new form of insurance likewise found a ready market. After the first six months 5,110 Intermediate policies were on the books for $2,555,000. At the end of 1901, only 5 1/2 years after this department was launched, there were nearly 110,000 Intermediate policies in force for an amount close to $55,000,000.

Within the next three years these figures more than doubled, and continued to increase rapidly. The use of intermediate insurance has been subsequently extended to include persons in somewhat hazardous occupations and for those with physical impairments which make them ineligible for standard ordinary policies. To widen even further the circle of protection, the Metropolitan in 1899 inaugurated "Special Class" policies for those who, because of occupation or physical impairments, could not meet the standards of ordinary or intermediate insurance.

An even more formidable task than building the ordinary department confronted Mr. Fiske when he joined the Metropolitan. Industrial insurance was under severe attack. Even before the Hegeman Fiske administration came into office, the storm clouds had begun to gather. Late in the 1800's a number of attacks were directed against industrial insurance. Incredible, but nevertheless true, was the fact that some worthy citizens of the day actually charged that life insurance policies on children endangered their lives because a number of parents would let their children die of neglect, or murder them for the insurance proceeds. This was an era of muckraking, and the sensational attack on Big Business, life insurance companies included, found a sympathetic response among certain legislators, newspapermen, and others who took up the cry.

Sarah Martin is a freelance marketing writer based out of San Diego, CA. She specializes in life insurance policies and the history of the Metropolitan Life Insurance Company. For a free no medical exam term life insurance quote, please visit http://www.equote.com/.

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

Life Insurance - An Important Part of Your Business Succession Plan
By Denise M

No matter how certain the future seems, there is always a need for a business succession plan. It's all too easy to give planning a miss when things are going well. But what happens when an unforeseen illness, a natural disaster, a premature death, or the sudden retirement of top management turns all your progress upside down? No one can plan for every type of disaster no matter how good you are at revenue projections or economic predictions. The reasons for having an efficient business succession plan are therefore manifold. With a number of contingency plans, you can ensure that your company stays afloat irrespective of whatever catastrophe occurs. Life insurance plays an important part in a business succession plan and can be easily integrated with many of the techniques and strategies often used in business succession planning. These could include:

Buy-Sell Agreement Funding - If a company has multiple partners and one of the owners dies, the shareholder's agreement most probably has the provisions for the shares of the deceased owner to be purchased by the other owners. In such situations, life insurance is the best way to provide the cash necessary to purchase the deceased owner's interest. In many cases and depending on how the policy is structured and the type of business involved, the premiums are often tax-deductible and the insurance benefits are also tax-free.
Key Person Insurance - A company is generally insured against the loss or damage of its property since office equipment and inventory are considered valuable assets. But, what about the value of key employees? Key employees are possible a company's most valuable resource. If this key person prematurely passed away, there could be a serious impact on profits and a sudden increase in costs with relation to hiring and training another suitable replacement. Insuring the life of a key employee can provide extra cash that will help keep the business running and offset any consequent reductions in revenue. There are some banks that demand key person insurance when approving significant business loans. This assures them that an unexpected death won't mean the end of the company and the lapse of any of their loan payments.
Estate liquidity - If business owners transfer all or most of their business interests to family members only after their death, life insurance can provide the children the cash necessary for them to pay estate taxes. Life insurance is also an easier (and less expensive) alternative to deferring estate taxes.
Estate equalization - In case a business owner leaves the business only to some children (active children), his or her life insurance can be left to the inactive children, thereby equalizing the inheritance among all the children. This policy is often owned by an irrevocable trust and also avoids the need and the unnecessary expense of buying off the company interests of the inactive children by the active ones.
Non-Qualified Deferred Compensation Plans (NQDC) - A NQDC can be used by a small business to provide members of the senior generation with death, disability and/or retirement benefits. This is especially useful in situations where senior members no longer receive any compensation from the company and have handed over the business to the junior members. The tax-deferred cash value growth and tax-free death benefits make life insurance a popular means to fund an NQDC plan.
Family bank - When a business is left to both active and inactive children, it is recommended that the voting interests lie only with the active children in the business. A life insurance policy on the owner's life will create a 'family bank' that allows the active children to satisfy the needs and demands of the entire family. This policy is generally maintained as a trust for the benefit of the active children.

The requirements for life insurance can vary from company to company and individual to individual. It is a complex process that needs several factors to be taken into consideration such as the nature of the business, the needs of the owners, along with individual financial and family situations. But, as life continues to change, the one certainty that remains is the need to plan and prepare in the present for a hassle-free secure future.

AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

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

Business Life Insurance - Option to Fund Buy-Sell Agreement
By Kyle J Norton Platinum Quality Author

There are three main options or ways to fund the Buy-Sell Agreement. I'm sure you won't be surprised to find that most Buy-Sell Agreements are paid out using life insurance. In fact, the first two funding options deal with available options using life insurance:

1. The criss cross option
Under this option the life insurance is owned and paid for by the partner out of after tax income. In other words, life insurance are purchased and paid for by the partner or shareholder on each other's life and the owners are the beneficiary. This is the primary and traditional method of structuring a buy-sell agreement and for sole proprietors and partners and it is the only option available for unincorporated businesses. Under the criss cross option, policies can be co-owned and paid for by split dollar arrangements.

2. Split dollar funding option
The second option to fund buy-sell agreement is split dollar funding option that is the pre-determined agreement between employer and employee on how to fund life insurance premiums. Split dollar funding became popular to fund several important functions.

a) Key man insurance and award.
b) Employee buy-out.
c) Corporate buy-sell agreements between shareholders and used as the incentive for a business to accommodate a split dollar buy-sell agreement
i) The premium payment creates unequal contributions due to extreme differences in the ages of the partners, or employees buy out the owner.
ii) If the employee is the son or daughter of the owner, it allows the siblings and heirs to be compensated in cash for their share of the business interest.
iii) It is particularly attractive in closely held corporations due to the lower corporate tax rate. This is not available to partners where the tax advantage is considerably less advantageous.
Whole life policy containing cash values is the best choice for life insurance used for buy-sell agreements.

3. Corporate repurchase and corporate redemption method
The third funding option for buy-sell agreements is the corporate repurchase or corporate redemption method. This is used solely by corporations, who may also use the criss-cross method. The corporate repurchase or corporate redemption method may be funded in one of two ways:

a) Cross-purchase agreement:
This technique is funded by tax free dividends. It provides for corporations:
i. To own the required amount of insurance on the lives of the shareholders.
ii. To pay the premiums.
iii. To be the named beneficiaries.

b) Corporate buy-back of shares.
Premiums of insurance are paid by the corporation.

I hope this information will help. If you need more information of the above subject, please visit my home page at:

Kyle J. Norton
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://businessinsurance15.blogspot.com/
All rights reserved. Any reproducing of this article must have all the links intact.
I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990

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

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