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Satisfying Debt Obligations
Many business owners finance the expansion and growth of their business through bank loans. However, many financial institutions may require life insurance on the owner of the business to secure or collateralize this debt. In case of the death of the business owner, the lending institution would recover its loan from the death benefit. A life insurance policy may provide the death benefit necessary to fulfill this obligation. The policy may be owned by the business or by the business owner individually with a collateral assignment of the policy to the financial institution. To the extent the proceeds exceed the debt, the owner of the policy can name a beneficiary for the remaining death benefit.
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