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Imagine a story of a business owner that found out their passion at an early age. This passion was for formal wear. Yes, tuxedos. A young entrepreneur found the desire for business, as well, at the very young age of 17 during a business class in high school. This passion led to many years of working in other people's retail stores, then managing the stores, then one day the dream came true, the goal was finally met. After 15 years building a reputation of excellence in this field, a financial backer was willing to grant a loan to this still young entrepreneur. Thus, he was able to buy his own Formal Wear retail store.
This business had an employee that brought in a tremendous amount of revenue from doing on site customer sales. This one employee truly had an impact on the business's bottom line. Without this employee going on site and working his magic with the customers all year long, the business's sales would suffer greatly. This is when it dawned on the business owner that if he did not protect his “asset” a great loss to his business could occur. The savvy entrepreneur called his insurance agent and started a conversation about buying “Key Person” life insurance. This entrepreneur didn't work all of his life to get to where he is to leave himself exposed if an unfortunate event caused him to loose such a key revenue generator for his company. He has built his life around his business and has made a smart move to find protection in a Key Person life insurance policy.
When a corporation is formed it separates the business from the actual owners. In a corporation setting there may be a highly valued employee, also know as, a Key Employee, or a Key Person. A business may want to protect themselves from incurring a loss should that Key Employee from that company die.
Key Person Insurance allows a business to buy life insurance on the life of its key employees. This type of insurance will ensure that the business can continue if that person should die. The reason why a business would be allowed to buy a policy on an employee is because the employee/employer relationship creates something called insurable interest.
This type of insurance policy covers the financial loss that the company may suffer at the employee's death. The policy is set up that the company is both owner and beneficiary of the Key Person insurance policy.
Further, when the company pays a premium for this type of policy these payments are not deductible business expenses. Conversely, the death benefit that is received by the company from this type of policy is income tax free. Overall, as a rule of thumb, life insurance premiums are not deductible if the person who pays the premium has any direct or indirect interest in the policy or its proceeds.
There are more ways to have life insurance provide protection in your life. An insurance agent can help you understand the products offered through insurance companies. They can also give you a better picture of what product is right for you or your business's needs.
Choosing the right policy is essential, this has become easier over the years thanks to the numerous search engines available on the internet. Everyone uses different criteria when searching for the right policy but majority of customers are known to do this based on the price and how much they can save on a policy
The recent credit crunch has affected lots of things including Life Insurance payments, many people have been looking for ways to reduce their premiums.
If you are one of the many Life Insurance policy holders looking to reduce payments then you are in luck because your lifestyle or slight changes to your lifestyle has the potential to save you money.
Some companies cut premiums for policy holders who buy fruits and vegetables in their supermarket whilst others offer lower premiums to customers who can prove they are healthy through gym memberships and the purchase of specific sports equipment.
Another incentive for lower premiums on offer for Life Insurance Policy holders is giving up smoking; not only do you benefit healthwise but you also save money. According to North Devon NHS, smokers spend an extra £676 per year on related expenses on top the actual cost of cigarettes. Smoking also causes diseases such as lung cancer, ulcers, heart attacks to name a few so premiums for smokers tend to be higher because statistics show they die younger.
For one to be considered as a non-smoker and take advantage of this offer you must have stopped smoking for a minimum of 12 months, this results in your premiums being lowered by over 50 per cent.
These cost cutting measures seems to have struck a cord with most customers, according to Life Insurance specialist Lifesearch, 14% of smokers (1.6million) have given up smoking since the introduction of the smoking ban in July 2007 and it is likely that majority of these people will be able to save on their Life Insurance premiums.
Another factor on the cost of life insurance premiums is alcohol, heavy drinking affects one's life span so insurers want to know the alcohol intake of their customers; they ask about their customers' alcohol intake on policy application forms and are particularly interested in the results of liver function tests. The test known as GGT measures the 'irritation' level of the liver, an elevated liver equals heavy drinker hence premiums are higher than that of a moderate drinker or the application gets declined. Things like DUI's, alcoholism and drug abuse also makes sure your premiums are higher or makes you all together 'uninsurable'. Up to two years after a DUI, customers can expect the highest of premiums, from two to three years customers can expect standard rates and only after five years can customers expect 'preferred rates' assuming they are in good health.
So if you want lower premiums now or in the future it might be worth making changes to your lifestyle, not only do you save money but it also ensures a healthier and longer life.