DeRamus Wealth Life Insurance Services
Home > DeRamus Wealth Life InsuranceWhat is life insurance?
Every insurance policy is an agreement or contract between an insurance carrier and a policy-holder. An insurance agreement states that the policy holder must make timely premium payments as agreed upon by both parties, and in exchange the insurance carrier will pay a benefit in the case of certain triggering events. DeRamus Wealth Management has years of experience assisting individuals and businesses in finding the best fit insurance products for their particular circumstances.
For example, if the policy in question is a life insurance policy, then the triggering event would be the death of the Insured. In the case of a long-term care policy, the triggering event might be an illness or an injury that renders the Insured incapable of performing specific ADLs – Activities of Daily Living. Some examples of ADLs include feeding oneself, dressing oneself, bathing oneself, and walking.
What is meant by business life insurance and what are the primary types of Business-Use Life Insurance?
In most cases, the largest asset a business owner has is his or her business. Typically the business owner receives regular income from their business currently. However, they also anticipate the sale of the business at some point in the future, as a way to fund their retirement. Life insurance is often used in a variety of ways by business owners to protect the value of their business and its most valuable assets. Some examples of the ways businesses use life insurance include:
Key Person Life Insurance
This is a type of life insurance policy that is owned by the business to insure the life of a key executive or other critically skilled employee. The business uses this type of life insurance to protect itself financially in the event of a premature death of an essential employee. Key Person life insurance can provide the business with the necessary capital to continue operations or to search for a replacement in the event that an owner or other exceptionally talented or customer-critical employee is deceased.
Buy-Sell or Business Continuity Life Insurance
This type of life insurance can be thought of as the business-equivalent of a pre-nuptial or post-nuptial agreement between partners in a business. Buy-Sell life insurance is an opportunity for business partners to ensure that their business will continue operations with minor outside disruption in the event that one partner dies. This life insurance provides the necessary liquidity for the surviving partner or the business to buy the deceased partner's interest from his or her spouse, family, or estate and avoids the potentially adverse consequences associated with of an unwanted or unskilled family member owner.
In addition to this type of life insurance, a business will frequently purchase disability insurance. This provides income continuity in the event of a disabling injury or illness that renders a key employee incapable of continuing their duties.
Deferred Compensation
A successful business will often generate profits that can be used to supplement the retirement accounts of the owner of the business. Cash values inside life insurance contracts grow tax deferred and receive favorable tax treatment when distributed, which is why life insurance is often used by a business owner as a preferred vehicle to accumulate cash reserves.
What type of life insurance is best for my company?
Life insurance premiums may be tax deductible depending on whether your business is a corporation, partnership, or sole proprietorship. Additionally, every business has its own unique set of needs and requirements. The best way to get the right life insurance coverage is to speak to a financial planning expert who is well versed in life insurance and its business uses. At DeRamus Wealth Management, we have the expertise and experience to carefully assess your business's operations, priorities, and financial statements and to work with your tax advisor in order to determine the most appropriate level and type of life insurance.
Why should my business turn to DeRamus Wealth Management for our life insurance products?
DeRamus Wealth Management is completely independent of any particular insurance carrier and our only goal is to represent our clients’ best interests and to ensure that our clients receive the best financial planning advice available.
As a full service firm that can help with all aspects of your business and personal financial planning from life insurance consultation to investment tax planning, DWM LLC can be a one-stop shop for premier wealth management services for its clientele. Its CEO has a diverse background in real estate, business, and financial services, which puts him in a unique situation to offer expert guidance to a wide range of individuals and businesses.