Joint First-To-Die for Business
Taking out a joint life insurance policy is generally less expensive than two individual policies and offers some unique, strategic benefits. There are two options, identified according to the terms of the payout: joint first-to-die and joint last-to-die. Each has different uses, depending on your insurance needs.
Business partners are essential to the success of a company. If either should pass away, in additional to considerable disruption to its operations, the business will encounter costs that can put it in a precarious situation financially.
Carrying debt is a routine part of running a company. Also, the surviving family usually become the heirs to the deceased partners shares, which means the surviving business partner would have to buy them out. Joint first-to-die insurance addresses both of these issues.
The cash can inject emergency capital during a time of crisis. The death benefit is payable with the passing of the first insured partner. Your Carte Financial Advisor can show you how this type of policy can protect your company.
A joint policy offers modest savings compared to individual policies, about 10%. However, if valuation of a company is high, this can add up significantly. For example, a multi-million-dollar company whose shareholders are mindful of operating costs.