Life Insurance Guide for Business Partners (2023)
You can buy life insurance for business partners as long as you have their consent. Premiums depend on factors such as age and medical history. Invest in enough coverage to keep your business safe should a tragedy occur.
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Leslie Kasperowicz
Farmers CSR for 4 Years
Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...
Farmers CSR for 4 Years
UPDATED: Jun 1, 2022
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.
UPDATED: Jun 1, 2022
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Life insurance for business partners is essential; establish it in your buy-sell agreement if possible
- Larger businesses with multiple partners should consider an entity-redemption plan
- Invest in enough coverage to purchase your late partner’s shares and support your business
Life insurance for business partners is essential. You should take some time and establish a cross-purchase or entity redemption plan in your buy-sell agreement. It may sound strange at first, but getting a life insurance policy in a business setting will help you avoid financial hardships.
Below, learn how to purchase business life insurance and discover the right coverage for you and your partner.
You can compare life insurance quotes for business partners by entering your ZIP code into our free rate tool above.
What are the average life insurance rates for business partners?
Can you buy life insurance for someone else, like a business partner? In truth, it is almost always essential to buy life insurance for business partners.
Not only does this help you purchase the business shares from your late partner’s heirs, but it also keeps your business afloat while you regroup.
If it seems difficult to consider, think of it as protection for your business. All parties will be insured, so that if there is a sudden loss of income due to a tragic accident, no one will be left floundering in debt. Compare life insurance rates for business partners at different term lengths for a policy with a $250,000 death benefit below.
| Age | Female Average Monthly Rates for a 10-Year Term | Male Average Monthly Rates for a 10-Year Term | Female Average Monthly Rates for a 20-Year Term | Male Average Monthly Rates for a 20-Year Term | Female Average Monthly Rates for a 30-Year Term | Male Average Monthly Rates for a 30-Year Term |
|---|---|---|---|---|---|---|
| 25-years-old | $9.31 | $10.25 | $11.22 | $12.74 | $15.28 | $18.27 |
| 30-years-old | $9.31 | $10.37 | $11.41 | $12.83 | $16.47 | $19.25 |
| 35-years-old | $9.77 | $10.61 | $11.83 | $13.45 | $18.72 | $21.69 |
| 40-years-old | $11.62 | $12.68 | $15.15 | $18.02 | $24.07 | $29.00 |
| 45-years-old | $15.51 | $17.41 | $22.16 | $27.39 | $34.70 | $44.58 |
| 50-years-old | $20.74 | $24.31 | $30.66 | $39.90 | $52.40 | $68.97 |
| 55-years-old | $29.03 | $37.57 | $47.87 | $62.49 | $92.40 | $128.52 |
| 60-years-old | $41.73 | $59.38 | $76.93 | $106.67 | N/A | N/A |
| 65-years-old | $66.52 | $103.91 | $134.30 | $200.43 | N/A | N/A |
How much coverage should you buy? Invest in enough to purchase your late partner’s shares and support your business during any sort of tragedy. That way you have the funds on hand to keep afloat during your time of need.
Search for the best life insurance company for business partners near you by comparing providers online.
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How do you buy life insurance for a business partner?
There are two common ways to purchase life insurance when you’re a business owner, either as a cross-purchase or an entity-redemption plan.
Often, you determine details about life insurance on your business partner in your business’s buy-sell agreement.
If you don’t already have a buy-sell agreement, create one with your business partner.
Otherwise, you risk suddenly going into business with their spouse or children should your partner pass away.
A cross-purchase means each partner takes out a policy on the other person, making themselves the beneficiary. If one partner dies, the other uses the benefit to purchase the other’s shares.
This type of plan is best for small businesses with only two co-owners.
In an entity-redemption plan, the business purchases separate policies for each partner, and the company is named the beneficiary. If a partner dies, the firm uses the death benefit to buy their shares.
This type of plan is best for larger businesses establishing multiple partners’ life insurance coverages.
In both cases, you’ll need consent from your business partner as well as proof of insurable interest or financial dependence. In this case, your business is the insurable interest.
According to the U.S. Department of Health and Human Services, consent means your partner signs a written paper permitting the insurer to access their medical records. Any questions should be directed to an insurance agent, who would be able to answer them while remaining tactful.
Life Insurance for Business Partners: The Bottom Line
In most cases, business partners should invest in proper life insurance for one another as part of your buy-sell agreement. This type of life insurance is common in the field of business.
Not only does coverage from the best insurance companies keep you financially safe if a tragedy occurs, but it can also keep your business afloat.
You can secure affordable life insurance for business partners right now by entering your ZIP code into our free quote tool below.
Are you looking for free insurance quotes?
Your one-stop online insurance guide. Get free quotes now!
Secured with SHA-256 Encryption
Leslie Kasperowicz
Farmers CSR for 4 Years
Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...
Farmers CSR for 4 Years
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.