Updating your business plan
Succession planning or business continuation funded with life insurance provides flexibility for business owners.
Although term insurance can be used to meet the needed funds at death, it’s the versatility of permanent life insurance that makes it the funding vehicle of choice to meet multiple goals.
There are exceptions, like a division where one successor can focus on sales, and the other on product development.
But businesses are generally much harder to manage with multiple decision makers.
Succession plans are commonly associated with retirement, although they also serve an important function earlier in the business lifespan: If anything unexpected happens to you or a co-owner, a succession plan can help reduce headaches, drama and monetary loss as your business grapples with a transition.
A succession plans makes it clear who will take over the business, reducing any potential disputes between parties.
If you choose to draft a buy-sell agreement with your co-owner, you’ll want to make sure a life insurance policy is stipulated in the agreement.
All Guarantees are based solely on the issuing insurance company, either AXA Equitable Life Insurance Company or MONY Life Insurance Company of America.
First things first, there is the question of will take over.
If you have just one family member who works alongside you, this is an easy decision.
Making business decisions within a family can get messy.
Emotions can get unhinged, especially after an untimely death or disability.