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As a business owner, you work hard preparing a good future for yourself, your family, your business partners and your employees. By incorporating life insurance from the John Nunes Financial & Insurance Services family of carriers into your business's financial strategies, you can begin to build a solid foundation for your personal and professional financial goals.


How is life insurance used?


Life insurance can be used for attracting and retaining key employees, financial management, protecting your business, retirement planning and succession planning.


What are the benefits of life insurance?


There are several benefits to both employees and employers when life insurance is used within business planning strategies. The primary purpose of life insurance is to provide death benefit to a beneficiary in the event the insured dies. This death benefit can be used to help ensure the continuity of your business or be used to transfer business interest. In addition, depending on the life insurance product chosen, a policy can be used to offer supplemental retirement income benefits to you and survivor benefits to your beneficiaries.

Buy / Sell Agreement

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Cross-Purchase Buy/Sell Agreement is implemented to protect a business, its owners, and their families in the event that one of the business owners dies. This agreement provides that the other owner or owners of a business will purchase the deceased owner’s interest in the company from his or her heirs. This agreement also makes it necessary for the deceased owner’s heirs to sell the interest to the other owner or owners of the business.


Cross-Purchase Buy/Sell Agreement will specifically ensure that each of the surviving business owners individually purchase a portion of the deceased owner’s interest. This type of agreement is distinct from an entity buy-sell agreement, in which the business itself, and not the individual owners, is obligated to purchase the deceased owner’s interest in the company.


Cross-Purchase Buy/Sell Agreement is very important as it helps the business to continue running smoothly after the death of a business owner. In addition, the agreement ensures that the business will remain within the control of its surviving owners, and that the heirs of the deceased owner will be fairly compensated for their inherited interest in the business.


To conclude, having some sort of buy-sell agreement in place in the event that a business owner passes away is extremely important to protect your business, its owners, and the inheritance of their family members.


For more information on Buy/Sell Agreements, contact us today.

Key Person Insurance

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Key Person Insurance is simply life insurance on the key person in a business. In a small business, this is usually the owner, the founders or perhaps a key employee or two. These are the people who are crucial to a business--the ones whose absence would sink the company. You definitely need to consider key person insurance on those people.


Here's how key person insurance works: A company purchases a life insurance policy on its key employee(s), pays the premiums and is the beneficiary of the policy. If that person unexpectedly dies, the company receives the insurance payoff. The reason this coverage is important is because the death of a key person in a small company can cause the immediate death of that company. The purpose of key person insurance is to help the company survive the blow of losing the person who makes the business work.

The company can use the insurance proceeds for expenses until it can find a replacement person, or, if necessary, pay off debts, distribute money to investors, pay severance to employees and close the business down in an orderly manner. In a tragic situation, key person insurance gives the company some options other than immediate bankruptcy.


For more information on Key Person Insurance, contact us today.

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