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Business Needs for Insurance

How can you help protect your business in the event of a death or transfer of ownership?

Protection Planning for Your Business

In these challenging times, “what ifs” are always top of mind. If, for example, something were to prevent you from running your business, how would you help protect your employees and your family? Explore our Protection Planning strategies below, to see which strategies may fit your business needs, and then reach out to your financial advisor for next steps.

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Business owner life insurance

It’s always important to help provide protection for your family in the event of your death, but it’s particularly true if you own a business. In addition to replacing the income your family depends on, you’ll need to consider providing funds to cover business-related liabilities. Your financial advisor can help you determine the right amount of coverage.

Key person insurance

If your company’s success relies heavily on the contribution of specific individuals, you may want to consider purchasing key person insurance. The proceeds would help offset the loss of sales or increased expenses your business may experience when a crucial employee dies.

Selling a business

If you sell your business and are being paid in installments, make sure the buyer has sufficient life insurance with the proceeds pledged to cover the remaining purchase balance if he or she dies before the sale is completed.

Transferring the business to a family member

If you’re planning to transfer your business to family members, how will you divide it? Sometimes life insurance is used to help equalize the estate so all beneficiaries get the same value when assets aren’t divided evenly.

If you intend to leave your business equally to both involved and uninvolved children, there are additional ways to structure insurance to give them flexibility. Consult your attorney on which structure best fits your situation.

Next Steps

  • Talk with your financial advisor to determine the right amount of life insurance coverage for your business and your family.
  • Consult your attorney on issues concerning business transfer within your family.

Insurance products are offered through non-bank insurance agency affiliates of Wells Fargo & Company and are underwritten by unaffiliated insurance companies.

Wells Fargo Advisors is not a legal or tax advisor. Any discussion of taxes represents general information and is not intended to be, nor should it be construed to be, legal or tax advice. Tax laws or regulations are subject to change at any time and can have a substantial impact on an actual client situation.