Life insurance has been designed to pay out a lump sum amount to determined dependents in the event of the death or sudden passing of an individual. With business life insurance, there are many different policies that can be taken out which not only protect the individual and their family, but the business too.
But, as with other forms of insurance, the amount charged is based on the risk that is posed and the probability of the individual making a claim. As such, this can mean that some insurance policies are more expensive than others, which can stop businesses from offering insurance policies to their employees. But, life insurance, as well as other insurance policies, don’t need to be so expensive. Here, we take a look at life insurance and whether it is too expensive for businesses to offer.
What Is Business Life Insurance?
Business life insurance helps to financially support your business should you, a business partner or a key employee become critically ill or pass away. There are a selection of different business life insurance policies which business owners can utilise and which provide cover for your business, and stop any financial losses which may occur from the loss of a key employee. There are some key types of life insurance policies that businesses may consider, including:
- Key man insurance
- Employee Benefits
- Shareholder protection
- Relevant life insurance
- Business loan insurance
Can You Reduce The Amount You Pay For Life Insurance?
The amount which you pay for life insurance is fixed from when you take out the policy, which means that you will pay the same each month no matter of any changes to your health and lifestyle. But, if you are a smoker and you stop smoking for 12 months, then you may then be eligible for cover as a non-smoker which could be cheaper than your original policy.
Tips For Reducing Life Insurance Costs
Choose The Right Policy Length
One way you can reduce business life insurance premiums is to choose a policy length which matches what you need. This is where choosing between life and term policies can reduce the amount you pay – life policies are more expensive than term policies, however, these offer more protection and likely a larger pay out. If an employee only wants a policy which protects them until their children are grown, then a term policy would be a better fit, whereas a life policy protects their family until they pass away.
Compare Quotes
As with other types of insurance, it’s always worth remembering that you can shop around for a better policy. If you are interested in having a few different insurance policies within your business, then a broker can help you consolidate quotes and find the best complimentary policies.
Tax Deductible
Some forms of life cover, as well as other insurance policies, are tax deductible, which means that you can save money on the premiums. Policies such as relevant life and key man insurance can be tax deductible as the policy is classed as an allowable business expense.