Life Insurance Policy
Life Insurance Policy Business Purposes
A life insurance policy can be used by a business owner as it is a valuable tool for the business. It is an important tool for cash value component as it can be used for a business expansion and an increase in stock. Writers who offer strategic management assignment help at Edudorm essay writing service notes that it is a good option as it reduces the overall risk of a business as it provides a basic financial foundation. Many problems are solved mainly those that are associated with the maintenance of the business as well as its growth and success due to the fact that life insurance policy covers the entire business and the owner’s estate (Goldman & Sigismond, 2014).
Life Insurance Policy as Loan Collateral
A life insurance policy in this matter can be used as loan collateral for the business expansion by a way of acquiring funds from banks or the private lenders. The policy provides an inexpensive platform for the loans due to the guaranteed level rates that are insured by the insurance policy due to the satisfaction of the requirement (Goldman & Sigismond, 2014). When a company uses the life insurance policy to get a loan the company pays the premiums, owns up the policy and the listed beneficiary. Experts who offer operations management assignment help at Edudorm essay writing service indicates that as long as the key man policy is effective the business owner and the bank can sign off the collateral agreement in which the assignment is a lien against the policy proceeds in which upon the death of the business owner the bank has the first rights to the outstanding amount the business owe and the remaining proceeds are injected back to the business hence the continuation of the business (Goldman & Sigismond, 2014).
Life Insurance Policy for Business Plan
A business owner may use a life insurance policy due to its numerous advantages. This is because the money accumulated from such a policy can be used in the business and plan for the unexpected. A life insurance policy is a very cost effective solution to the many threats that affects the business such as the loss of an owner or a key employee (Goldman & Sigismond, 2014). Authors who offer corporate strategy assignment help at Edudorm essay writing service points that a life insurance policy can be used in a key person insurance, protection of a business loan, sell funding of the business such as finding of the capital tax gains in case of a business in death and the split of dollars arrangement that may exist in a business. The owner may use the policy platform so as to provide the business with the numerous advantages of taxes on investing and on the part of the enticing compensation package that can be used to attract best employees (Goldman & Sigismond, 2014).
Executive Compensation
A life insurance policy for a business owner comes with executive compensation that often supplements a very beneficial package that attracts executive. Such packages offer a wide range of benefits that includes a policy protection. This ensures that upon the death of an executive their dependents receive money that is used to cater for all the expenses that are connected to the funeral arrangement, reduction of debt, education costs and provide a future income for the dependents (Goldman & Sigismond, 2014). The policy can also be used by the owner in order to provide a beneficial portion to the employees that can funded jointly.
Conclusion
Life insurance policy can be used to protect the interest of the business owner and ensure prompt operation of the business itself. Tutors who offer strategic marketing assignment help at Edudorm essay writing service acknowledges that the policy also provides a sense of security to the creditors even with the departure of key personnel’s. It is also a wealth creation strategy that can often be used to increase business operation achieving stability which is essential for the future success of the business (Goldman & Sigismond, 2014).
Reference
Goldman, A. J., & Sigismond, W. D. (2014). Business law: Principles and practices. Mason, OH: South-Western Cengage Learning
