Your Michigan business runs on a few essential people, and it carries debt, partners, and payroll that all depend on them. From shops in Detroit, Grand Rapids, and Warren to companies across the state, protect the business if an owner or key employee dies, fund a clean partner buyout, satisfy your lender, and keep the people who make you money. Built with you and your CPA or attorney. Licensed in Michigan, NPN 22121673.
If the business would stumble when one person is gone, that person is a key person.
Key person insurance, sometimes called keyman insurance, is a policy the business owns on an owner or an essential employee. The company pays the premium and is the beneficiary. If that person dies, the death benefit goes straight to the business so it can absorb the lost revenue, recruit and train a replacement, reassure lenders and clients, and keep payroll moving while it steadies itself. For Michigan business owners in Detroit, Grand Rapids, and Warren and beyond, it buys the company the one thing it cannot manufacture in a crisis, which is time.
A buy-sell agreement is the contract that decides what happens to an owner's share if that owner dies, becomes disabled, or exits. Life insurance is what makes it work. When an owner dies, the policy pays cash so the surviving owners or the business can buy out the deceased owner's share at a value you agreed on in advance. Without it, you risk being in business with a grieving spouse who needs cash, not a partnership, while you scramble to find the money. Funding it with life insurance turns a worst case into a written plan. The structure varies by company type and goal, so for Michigan owners we design it together with your CPA or attorney. You can review how the U.S. Small Business Administration frames planning for business continuity.
Lenders know a small business often lives or dies with one or two people, so many require life insurance on the owners or guarantors as a condition of the loan. SBA 7(a) loans frequently call for it. The policy is collateral-assigned to the lender, which means if the borrower dies, the loan is paid off first and any remainder goes to the family. That clears the debt the family personally guaranteed, keeps the business solvent, and gets the loan approved. For Michigan borrowers in Detroit, Grand Rapids, and Warren and beyond, we size and structure the policy to match exactly what your loan documents require, no more and no less.
An executive bonus plan, often called a Section 162 plan, is a simple way to reward and retain a key employee. The employee owns a permanent life insurance policy, and the business pays the premium as a bonus to that employee. The employee walks away with valuable coverage and the cash value the policy builds over time, which is a powerful reason to stay and grow with you. It is straightforward to set up and easy for the employee to understand. Because the tax treatment depends on how it is structured, we design it with your Michigan CPA or attorney so it does what you intend.
A short call about your owners, key people, debt, and partners, and what you are trying to protect in Michigan. No pressure, no jargon.
I compare A-rated carriers and structure the ownership, beneficiary, and assignment to fit your goal, in step with your CPA or attorney.
We file together. Many cases approve fast, and your coverage, buyout, or loan requirement is in place.
Key person insurance is a life insurance policy a Michigan business buys on an owner or an essential employee. The business owns the policy, pays the premium, and is the beneficiary. If that person dies, the death benefit goes to the company so it can cover lost revenue, recruit and train a replacement, reassure lenders and clients, and keep the doors open while it recovers. It is common for companies in Detroit, Grand Rapids, and Warren and across Michigan.
A buy-sell agreement is a contract between business owners that sets out what happens to a share of the company if an owner dies, becomes disabled, or leaves. Life insurance funds it: when an owner dies, the policy pays cash so the surviving owners or the business can buy out the deceased owner's share at an agreed value, instead of ending up in business with the family of the deceased. The structure varies, so for Michigan owners we design it alongside your CPA or attorney.
Often yes. Many lenders, and SBA 7(a) loans in particular, require life insurance on the owners or guarantors as a condition of the loan, especially when a Michigan business depends heavily on one or two people. The policy is collateral-assigned to the lender so the loan is paid off if the borrower dies, which protects the lender, the business, and the owner's family.
An executive bonus plan, sometimes called a Section 162 plan, is a way for a Michigan business to reward and keep a key employee. The employee owns a permanent life insurance policy and the business pays the premium as a bonus. The employee gets the coverage and the cash value the policy builds, which gives a strong reason to stay. The exact tax treatment varies, so we design it with your CPA or attorney.
It depends on the goal. For key person and buy-sell coverage the business or the other owners usually own the policy and receive the benefit. For a loan, the lender is collateral-assigned. For an executive bonus, the employee owns the policy. As an agent licensed in Michigan, I map out ownership and beneficiary structure with your CPA or attorney so it matches your intent. Licensed in Michigan, NPN 22121673.
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