Life Insurance for Entrepreneurs 

Business owners often seem larger than life. They have the guts, the foresight and the stamina to introduce a new idea to the market and to keep moving forward, even when everything seems to be working against them. But the truth is, these innovative founders and titans of industry are just as mortal as the workers they employ—and that means they need to think seriously about the

value that life insurance can bring to their business and their legacy.

¹ Policy loans and withdrawals will reduce available cash values and death benefits, and may cause the policy to lapse or affect any guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject ordinary income tax. Withdrawals are generally income tax-free, unless the withdrawal amount exceeds the amount of premium paid.   Tax laws are subject to change.  Clients should consult their tax professional. 


Keep in mind that most life insurance policies require health underwriting and, in some cases, financial underwriting.

Three Ways Life Insurance Helps Entrepreneurs 

We all know that life insurance pays out a death benefit to our heirs and that, when properly structured, this benefit can be tax exempt. But life insurance isn’t as simple as some might think.


When a policy is designed by a specialist taking an entrepreneur’s distinctive needs into consideration, life insurance can provide unique benefits that are even helpful during the business owner’s lifetime. Let’s look at three ways entrepreneurs can use life insurance to strengthen their companies. 


  • Funding buy-sell agreements: In a business with one or more partners, life insurance policy proceeds can be used to fund the purchase of a deceased business partner’s equity.

  • Tax-free capital source for the business: When a business needs added capital, if the owner has a properly structured life insurance policy, they can tap into the cash values for loans to fund expansion, research and development, business continuation and more—all without triggering a tax liability.¹ 

  • Preserving operations after the loss of a critical employee: If your business relies heavily on the individual talent, knowledge or skill of one or more employees, then a life insurance policy covering those key associates will help ensure you have the resources you need to recruit, hire and train a replacement in the event that one of these employees passes away. Funds can also be used to help continue the business when an employee’s death results in a reduction of revenue.


These are just a few of the ways that a life insurance policy can protect the business and interests of entrepreneurs. Meeting with an experienced advisor can show you many other ways that policies can be designed to protect a founder’s legacy, business and family.


Actual fees may be higher or lower depending upon each client's specific situation and the products they select. Investors should note that the deductions of fees will impact overall account returns.  This communication is strictly intended for individuals residing in the state of Texas, California, Virginia, Maryland, and North Carolina. No offers may be made or accepted from any resident outside the specific state(s) referenced. Neither NEST Financial nor Union Capital Company, offers tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.


Securities offered through Union Capital Company, member FINRA/SIPC. Investment advisory services and insurance offered through NEST Financial LLC, 5323 Levander Loop, Austin, TX 78702 , 512-944-4882, which is not affiliated with Union Capital Company. Neither Union Capital Company nor its registered representatives, offer tax or legal advice.

5323 Lavender Loop | Austin, Texas 78702

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