Life Insurance as a Requirement
Beyond reaping the benefits of paying for life insurance as a business expense and offering your employees a benefit, there are other reasons you may need life insurance:
Franchise Business Owners - If you own and operate a franchise, you may be required to obtain a life insurance policy to cover what you would owe the franchisor if you died prematurely. Read your franchise agreement to find out if your franchisor requires this. If you own a franchise and are the sole owner, it's also a good idea to get a life insurance policy so your estate can pay off any expenses.
Banks and Lenders - If you borrowed money to start your business, the bank or lender where you obtained the loan may request you get a life insurance policy and make them the beneficiary of that policy in the event of your premature death so the entire loan will be paid in full.
Lease to Own Buildings - If you lease to own the premises where your business sits, the owner of the property may require you to get life insurance and again name them as a beneficiary so the lease to own agreement will be fulfilled in case you die prematurely.
Partners - If you have a partner and that partner has been the silent investor, or the "money person" so to speak, he or she may require you to obtain a life insurance policy to cover that debt in the event you pass away.
Large Equipment Expenses - Purchasing large equipment often requires a business owner to finance that equipment. Most equipment retailers have their own financing departments that may require you obtain a life insurance policy with the equipment financing department as the beneficiary in the event of your death.