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Succession Planning: Life Insurance
Have you thought about what would happen to your business if something unexpected happened to you? There’s no doubt this would have a tremendous impact, but there’s good news – this is something for which you can plan. A thoughtfully developed succession plan can help ensure a smooth transition of your business.
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What is succession planning?
Succession planning is the process of protecting the longevity of your business. Succession planning is about preparing for the unexpected and helping to ensure that your business will continue in the manner in which you choose.
How is life insurance used?
Life insurance is often used to fund a buy-sell agreement, one of the most popular business succession planning strategies. A buy-sell agreement involves one party buying a deceased business owner's interest in the business at a certain price, and another party, usually the deceased owner's estate or heirs, selling the interest at that price. By entering into a buy-sell agreement, you can help ensure a smooth transition of ownership, with minimal disruption to the day-to-day activities of the business.
What are the benefits of life insurance?
The death benefit in a life insurance policy ensures that the surviving owners will have a source of liquidity to buy out a deceased owner's share of the business. In some cases, you also have the flexibility to increase or decrease your coverage to keep pace with the value of your business.
What are the different types of life insurance that can help in your succession planning?
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Universal Life Insurance
Universal life insurance provides lifetime death benefit protection along with flexibility that gives you choices as your needs and finances change. It offers options such as coverage amounts that may be increased or decreased, and premiums that you can vary based on your finances.
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Whole Life Insurance
Whole life insurance provides protection for a lifetime. Whole life insurance offers a combination of guarantees that you can’t find in other forms of life insurance, including guaranteed premiums that will not increase, a guaranteed death benefit and guaranteed cash value growth, providing the premiums are paid when due and certain requirements are met.
Prefer to speak to someone about life insurance?
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Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.
CRN201208-138995
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