261 / What is business life insurance?

Business life insurance is life insurance owned by a business, regardless of whether the business is a sole proprietorship, partnership, or corporation. The insurance can have a number of different purposes. For example, the insurance can be used to insure the life of a key employee, whose death could have a considerable negative impact on the business. The insurance could be purchased as part of a buy-sell agreement where the business is obligated to purchase the ownership interest of an owner who dies. The insurance also could be used to fund a non-qualified retirement package for a single employee or a number of employees.