Legally, when a business partner dies, the heirs stand to gain the partner's shares of the business. For many companies, this is not acceptable. It would either mean working with someone not honed in to the way the business runs or facing bankruptcy because the business debts would become too much to bear.
Common Life Insurance Amounts For Business Partners:
Many businesses fail to thrive when a business partner dies unexpectedly. For a minimal cost, you can guarantee that your business remains stable during any unforeseen event.
It's worth the price to have that security. In addition, it is an excellent way to make sure your own family doesn't suffer financially.
Life insurance for a business partner - also called Keyman or Keyperson insurance - can help prevent this. The insurance policy works like any life insurance policy. Should the policyholder pass away, the beneficiary (the business in this case) receives the lump sum payment.
With business life insurance, the business then gets the money and can either give the money to the deceased's spouse or significant other to buy-out the shares of the business or invest it into the company's debts. This will be determined by the wording in the business contract.
It is common in any partnership or corporation for each partner to take out a life insurance policy on another partner. This is completely legal because of their business connection. Rates will vary, but with the Internet it is easy to really do some comparison-shopping first.
After you have quotes from a number of businesses, you can use these rates to get insurance companies to compete for your business. Many times, this can help you get a percentage off the original insurance quote.
Rates are always lowest for those who are not overweight, do not smoke or have a family history of cancer, or diabetes or heart disease. Smokers can expect to pay up to three times more for their life insurance policies; the same can be true for those who are obese.
Some extra weight may not matter much, but being severely overweight will count against you. Certain hobbies or activities also increase your premiums. Sky diving, bull riding, boxing, flying planes, etc. all count against you because they are considered high-risk.
If you do fall into any of these higher risk categories, you should visit a doctor and provide documentation that you see a doctor regularly. This can make a difference to a life insurance company. In the end, they may be willing to raise your insurability ranking. This ensures you get a better rate.