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Many businesses provide his or her employees with health insurance, life insurance and even disability insurance. The benefits to the employer for such an offering include:
- Employer sponsored benefits helps retain employees
- Many group sponsored programs are less costly and provide broader coverage than individual policies
A business might also need more specialized life insurance products to protect the interests of the business, such as Key Man Insurance or Buy-Sell agreements.
Key Man Insurance
This type of policy is purchased to potentially help protect the business from the financial loss that might occur when a very "Key" employee or corporate officer dies. The paid benefit is available to allow the business to continue until this person can be replaced.
Buy-Sell Agreements
For corporations or partnerships who have minimal owners can purchase a buy/sell agreement to protect for the uninterrupted continuation of the business. These agreements provide a pre-agreed price for each share and an arrangement that the share must be sold to the remaining owners or partners. The life insurance is purchased to provide the necessary funds to "buyout" the rights of the deceased owner or survivor.
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