Business Life Insurance has several different uses and purposes.

• Sole Proprietors - Self employed people are usually entirely liable for the debts assumed by their business endeavors. In the event of your death, you are still held accountable for any business liabilities.
  
  If you do have substantial business debt, and you have no life insurance, your personal assets will be liquidated in order to satisfy these financial obligations. Without some type of protection, you run the risk of leaving your family with nothing.

• Ensure Business Continuity - Regardless of the ownership structure (e.g., corporation, partnership, sole proprietor), the death of the founder of a small company can often mean the demise of the company itself.  Prudent businessmen often buy life insurance in an amount large enough to cover all their business debt and provide necessary funds for the future success of the business as well as their families.
  
  With this type of protection, you can rest assured your business will not drive your family into debt after your death. Instead, there will be ample funds to settle any business debts so the business can continue to flourish as it once did under your direction.
   
• Key Man Insurance - Purchasing a life insurance policy on each of the key employees in your firm is a good part of any small business plan. The business itself should be named as the beneficiary of the policy, and the amount of coverage selected should be enough to cover the cost of finding a suitable replacement.
  
  Certainly, it is difficult to imagine the effect of the loss of just one person. Nevertheless, one individual often can be critical to a small company's success.  Losing such an employee can often result in slowed production and reduced earnings. Having extra funds to finance the search for a replacement, make up for lost profits, and weather the possible tough transition is crucial for your business.

• Buy - Sell Agreements - These arrangements benefit the family of a business co-owner in the event of their death.
  
  In essence, it is a deal between business owners to purchase a co-owner's portion of the company at certain price if the co-owner dies. Often these agreements are funded with a life insurance policy. The policy's proceeds are used to buy out the deceased's share of the company.
  
  There are several types of buy sell agreements which vary in who purchases the policy - the corporation, the owners, or a trust. It is recommend that you consult with an attorney if you are considering this type of plan.  At Avalon Life we specialize in these types of plans and can work with your advisors to make sure you get the best value.