Business Insurance

Corporate Insurance:

Whether you’re starting out or looking for ways to grow your business, corporate insurance can help you protect yourself, your partners and employees and your family.

In the early stages of your business, MK Financial & Insurance Services can help you create a plan to keep your business running and your cash flow consistent. This way, you can remain on track even if you lose a key member of your team. Or if you suddenly need cash for a buy-sell agreement if a partner dies.

What happens when it’s time to tap into assets to help pay for your retirement, wrap up your business or pass it down? We can help you plan for a tax-efficient transfer – while helping you protect yourself, your family and your employees with life, health and disability insurance.

MK Financial & Insurance Services takes the time to understand your specific business situation and find the right coverage to safeguard your success.

Key Person Insurance:

Key person protection uses life and critical illness insurance policies to help you protect your business from the costs that result from death or critical illness of a key person.

• You and your advisor estimate the financial impact of the loss of your key person. This typically ranges from 5 to 10 times the key person’s income.
• Your company takes out life and critical illness insurance policies on the key person’s life. For example, a 10-year term life insurance policy and a 10-year term critical illness insurance policy that would help meet the needs.
• If the key person dies or suffers a critical illness, the policy benefit is paid to your company tax-free.

Life and critical illness insurance let you transfer some of your risk to the insurer.

Your total cost is limited to the premiums paid for the insurance policies.

The expenses resulting from the loss of a key employee may no longer be unexpected or unmanageable.

Key person protection is a cost-effective way to help ensure the continued viability of your business in the face of a specific risk.

• For immediate but temporary coverage – low-cost term insurance based on the key person’s age, health and expected employment period.
• To raise additional cash during the key person’s life – universal life turns excess deposits into accumulating tax-preferred cash values.
• To help protect against illness – critical illness insurance pays a lump sum if the key employee suffers and survives a critical illness.

Buy/Sell Agreements:

Whenever a corporation has more than one shareholder, it is commonly recommended that the shareholders enter into a buy-sell agreement to operate in the event of a shareholder’s death, disability, retirement, or conflict with other shareholders or a number of other specific circumstances.

There are numerous objectives for such an agreement. The agreement can provide for a smooth transfer of the business interest, avoiding potential disputes about the need for the sale/purchase, the price and other terms of sale. Most importantly the buy-sell agreement creates a degree of liquidity for the normally illiquid shares of a private corporation.

Failure to facilitate this smooth transfer could jeopardize the financial well-being of the departing shareholder and his/her family. It could also jeopardize the financial health or even the viability of the business.

By providing for a sale, the likelihood of a confrontation between the departing and remaining shareholders will be minimized. Employees, customers, suppliers and creditors will be reassured about the continuity of the business. Where appropriate funding has been mandated in the agreement, creditors will also be reassured about the financial health of the business and the remaining shareholders after the buy-out.