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A Business Owner’s Guide to Life Insurance

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Public liability insurance. Legal cover. Buildings insurance. Stock insurance. All these come naturally to business owners. However, PHP Agency reviews that they tend to forget about one very important insurance type — life.

It is essential to consider how one’s business would cope if a crucial staff member became seriously ill and could no longer work, as well as to keep in mind the financial ramifications if a key stakeholder or owner passes away unexpectedly. While it isn’t a pleasant topic to ponder, it’s vital to the welfare of everyone involved in the company.

From an employee benefits perspective, life insurance can retain workers, bolstering the cruciality of the coverage for company owners.

Types of Insurance Business Owners Must Consider

Like other insurance types, company owners have various life coverage options, including:

Keyperson Insurance

Life insurance is as essential for business owners as it is for individuals. It keeps their loved ones safe during a worst-case scenario.

Otherwise referred to as business owner life insurance, keyperson insurance can keep the company afloat if an important person dies or is diagnosed with a critical illness.

Generally speaking, the coverage protects one pivotal person within the enterprise, typically being the founder or chief executive. However, some companies also insure employees that have skills crucial to success (e.g., top salespeople).

The main difference between keyperson insurance and standard life coverage is that the payouts can only be used for the continued running of the business. This includes debt repayments or the costs associated with recruiting new staff members.

Directors’, Owners’, and Shareholders’ Business Life Coverage

Business owners need to consider the events that could occur if another owner, shareholder, or business partner died or couldn’t return to work. Historically, such situations have caused considerable difficulties and disputes within the remaining group, hindering the overall success of the company.

In a similar fashion to keyperson insurance, shareholder coverage protects from the aforementioned result. For example, the funds could be released to help buy out the shares of the departed shareholder.

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Group Life Insurance

Group life insurance is an easy way for business owners to offer coverage to a (sometimes large) number of staff members. Every worker has the same terms and can normally take advantage of group discounts.

Offering the proposal can be a real benefit for company owners — they’ll have an easier time attracting and keeping valuable employees, and the staff who utilize the benefit will know that their loved ones are protected in case they pass away unexpectedly.

Life Insurance Tax Benefits for Company Owners

While life insurance is a necessity regardless of tax benefits, owners who offer group programs can normally claim the premiums as tax deductible. It’s worth noting, though, that this might not be the case with shareholder and keyperson insurance.

While these payments can sometimes be tax deductible, it really depends on a myriad of factors. Particularly on how the payout proceeds would be utilized by the company. Curious owners should talk to their financial planners to find out more about this area.

Ultimately, life insurance is essential to business owners, as it increases employee retention and ongoing success even after they pass or lose the ability to work.

Calculating Life Insurance Needs at Age 40

Life insurance provides beneficiaries with a lump-sum payout once the policyholder dies. But, unbeknownst to many, it replaces more than just lost income. After all, every 40-year-old should have some type of coverage, even if they aren’t working.

PHP Agency reviews that people approaching middle age often put off acquiring the imperative policy because they don’t know how to calculate the amount they need. Luckily, with a little bit of research and effort, it can really be quite easy.

Calculating Life Insurance Needs

The challenging part about calculating life insurance is that there is no “one size fits all” method. Financial planners tend to suggest methods aligned with their client’s family obligations, the standard of living they want to give their loved ones, and the amount of debt they have.

The most popular methods for working out how much life insurance a 40-year-old should purchase are as follows:

Final Expensive Coverage

Final expensive coverage is a small death benefit that helps the surviving family members cover the costs of funerals and burials or cremations.

On average, funerals cost between $6,971 and $7,848. However, this can quickly ramp up if relatives decide to host a wake, purchase flowers and other adornments for the coffin, and more. So, people opt to take out a life insurance policy that covers these exorbitant fees.

However, most term life providers won’t allow policies this small. So, wannabe policyholders will have to choose a permanent life coverage plan, like universal or whole life insurance.

Ten Times Yearly Salary

This is perhaps the easiest way to calculate how much life insurance to take out at age 40 — policyholders just multiply their yearly earnings by ten.

For single adults, this is a good benchmark rule to use.

For example, in California, a non-smoking, healthy 40-year-old female making $50,000 per year could get a 20-year policy with a death benefit of $500,000 for $30 a month.

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Ten Times Yearly Salary Plus $100,000 Per Child

Mortgages and other massive debts can consume a six-figure payout easily, making ten times yearly earnings smaller once expenses are considered.

So, some 40-year-olds with children multiply their incomes by ten and add $100,000 per child to the figure.


The Debt Income Mortgage Education method involves:

  • Finding the total value of debt, including outstanding mortgages
  • Adding the policyholder’s expected income until every child reaches 18
  • Adding children’s education costs.

The average 40-year-old has roughly $350,000 in mortgage debt without student loans, credit cards, and/or other personal loans, like car or home equity loans. With two children and a modest salary, many people decide to get a $1 million life insurance policy.

The Bottom Line: Everyone Should Consider Obtaining a Life Insurance Policy

Individuals should consider acquiring life insurance as soon as possible if they have others who depend on their income or non-financial work (e.g., cooking, cleaning, etc.) to survive. But it’s never too late to get coverage.

Everyone in their 40s should have a life insurance policy to financially protect their families upon their untimely death, ensuring they can cover debts and funeral costs, and still have some money left over.

Life Insurance and Financial Planning

Life insurance is often viewed as a far-off solution to the gloomier “what-ifs” of later life. Yet, by viewing it this way, American families often miss out on the potential benefits of using insurance as support for their existing financial plans.

When used appropriately, PHP Agency reviews that life insurance can help immensely with covering long-term goals, such as retirement or the costs of college tuition. It can also grant financial freedom to those who would otherwise be left dependent on the deceased’s remaining estate. To better understand these benefits, how life insurance works and how to diversify a portfolio using a new insurance policy is detailed below.

The Basics of Life Insurance

Life insurance is a legally binding contract between an individual client and an insurance company. By signing such a contract, the insured client agrees to pay a monthly sum to the insurer with the understanding that, should they pass away, the insurer will pay out an agreed-upon sum in full to the insured’s remaining family, dependants, or other specified individuals.

These funds can then be used to cover funeral costs, outstanding debts, medical bills, and other living expenses. Many families also use this money to supplement lost income, cover tuition fees, and contribute to a sense of financial security after a loved one has passed.

Building a Stable Financial Plan

Although life insurance should make up a part of all comprehensive financial plans, it’s important to consider long-term goals and objectives before investing in any policy. With these goals in mind, the insured party can then formulate an outline for how they will reach their desired financial future.

This plan should include a budget that accounts for current and expected expenses, as well as an investment strategy to better gauge the amount of financial flexibility or support they may need from a policy. With these factors in mind, they can then make an informed decision about what to choose.

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Incorporating Insurance

After drafting a comprehensive financial plan, policyholders can also use their insurance to diversify their portfolios. Ideally, they should find the policy that costs as little as possible while also offering the highest amount of coverage. Of course, the exact policy they need will depend on personal financial goals and considerations as well.

For example, if a policyholder intends to supplement their partner’s future retirement savings, they would be better off purchasing a permanent life insurance policy. If they only intend to cover future funeral expenses, however, then a term life insurance policy may be more affordable and come with more flexible terms.

The Bottom Line

Life insurance is more than just a last resort—it’s an important part of a comprehensive financial plan. Not only can it help to provide financial security during difficult times, but it can also help families to reach their long-term goals. Of course, policyholders should carefully draft blueprints of their financial futures and invest in policies that are best suited to their personal needs. Only then can they start to invest wisely.

When Seniors Should Consider Life Insurance

Life insurance is generally advantageous for many adults. Thanks to the typically minimal costs, policyholders can ensure that loved ones have a financial safety net once they die.

Even though the benefits of this coverage are typically well-known, seniors are often left out of the equation. For older adults, life insurance isn’t usually deemed “worth it” due to the increased monthly premiums.

However, PHP Agency reviews that this doesn’t mean all seniors don’t need it. On the contrary, in certain situations, it can be beneficial for older adults.

Three Reasons Why Seniors Should Obtain Life Insurance

This type of coverage can supplement savings or fill a financial gap for most adults, including seniors in the following situations:

Life Insurance Helps Cover End-of-Life Expenses

While most adults obtain life insurance with payouts in the six- to seven-figure range, those who are only looking to cover end-of-life expenses won’t need that much.

Experts suggest around $20,000 or less for burials and funeral costs, so seniors can expect to secure life insurance coverage for reasonable monthly premiums.

Older adults should think realistically about their end-of-life requirements. After all, burdening loved ones is something most people want to avoid. So, a life insurance policy can prevent this from happening in case seniors don’t have enough home equity or savings to cover such costs.

Those With Debt That Will Outlive Them Should Consider Life Insurance

People should seek complete understanding of their personal financial circumstances before acquiring life insurance for this reason. Often, seniors choose to seek assistance from financial advisors.

Debts like mortgages, personal loans, and outstanding credit card balances are carried over to heirs when people die without enough money to cover them. Therefore, some older adults choose to take out life insurance policies that cover their debts, ensuring their relatives won’t need to pay them instead.

As mentioned, not everybody requires life insurance for this reason. Even mortgagees with balances can be valuable once the outstanding amount has been removed.

However, seniors concerned that they’ll leave loved ones with their remaining bills should seriously think about getting a life insurance policy.

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Life Insurance Provides Inheritance

Older adults with limited home equity and minimal savings choose to take out life insurance coverage to give their beneficiaries inheritance (regardless of the amount). After all, this is the main reason that anybody obtains life insurance!

Naturally, senior policies aren’t going to be robust, and they’re more expensive than those for younger adults. However, it allows older people the chance to leave a nest egg for their family.

Underlying Health Conditions and Life Insurance

Those who relate to the three situations above should consider their underlying health conditions (e.g., obesity, mental health concerns, cancer, diabetes, asthma, and heart disease) before applying for a policy.

Some providers aren’t able to offer coverage to those with certain medical conditions, and those that do tend to boost their premium payments, making them more expensive.

That being said, seniors shouldn’t immediately rule out life insurance, as it can be incredibly beneficial for those they leave behind.

Employees Have Spoken – and They Want Life Insurance

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Today’s top talent wants more than a stable career—they also want comprehensive benefits complete with insurance and retirement plans. Whereas traditionally this would have meant health insurance, businesses are now realizing the power and importance of also offering term life insurance. By meeting their employees’ needs, companies can boost worker satisfaction, retention, and recruitment.

For nearly 47% of Americans, life insurance is a luxury they can’t afford. Yet this doesn’t mean that their families don’t want or deserve coverage. PHP Agency reviews how employers are helping to fill the life insurance gap and how it’s benefiting their recruitment processes and employee morale.

Life Insurance is a Low-Cost/High-Value Benefit

Employees already spend the majority of their waking days getting ready, commuting to, and then working in an office. With such a time commitment, it’s only fair that they expect some benefit to compensate for their lives spent in employment. While vacation time, health insurance, and retirement packages have traditionally been the gold standard, employees are now recognizing the importance of life insurance.

To workers, life insurance is about more than just the coverage itself, though. It’s a sign that their employer cares about them and their families. In the event of their death—even if unrelated to work—life insurance provides financial stability for loved ones who are left behind.

From a business perspective, it also makes sense. Compared to health insurance policies, a term-life plan is relatively inexpensive, especially when bundled into an office-wide program. Yet, to employees, it’s a high-value benefit that’s powerful enough to keep them onboard and productive.

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Life Insurance Increases Retention and Recruitment Rates

By staying ahead of the competition and attracting the best talent, modern businesses must provide comprehensive benefits with built-in life insurance. This is especially true for small businesses and startups, who often need to get creative to lure in experienced workers. While some companies may be hesitant to spend the extra money on benefits like life insurance, doing so more than pays for itself in the long run.

In fact, research shows that offering life insurance can lead to a decrease in staff turnover rates. It’s also been proven to be an effective recruitment tool. After all, life insurance is a major factor of employees’ financial health. By guaranteeing current and potential workers that their families won’t be thrown into financial crisis if they die, you show that you value their worth beyond a monthly paycheck.

This is far more alluring to new hires and existing staff than a corporate retreat, holiday party, or any other non-financial benefit. In the end, employees are there to cover their financial needs. Life insurance helps meet those needs and creates an environment where staff can trust their management and feel safe in the long-term.

The Bottom Line

By offering life insurance is a smart business decision. Not only does it show that you care about your employees’ families and finances, but it also helps to boost company-wide morale, worker retention rates, and new hires. Best of all, it is what employees want and, by bundling policies, it’s relatively inexpensive.

How Inflation Affects Life-Insured Individuals

In general, investors, consumers, and financial regulators can all agree on one thing—inflation is rarely good for the economy. It leads to rapidly rising costs, devalues currencies, and undermines the value of investments. Yet inflation isn’t always a bad thing. When it comes to life insurance policies, the benefits of inflation can sometimes outweigh the downsides.

Although inflation usually causes consumer goods to become more expensive, it can have the opposite effect on insurance premiums. PHP Agency Reviews takes a look at how inflation affects insurance policies and learn why individuals with life insurance may actually benefit over the next year or two as inflation continues to rise.

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Understanding How Inflation Affects Interest Rates

To understand how inflation affects insurance premiums, it’s important to understand how inflation affects interest rates. In short, the relationship between these two economic measures is positively correlated. When inflation rates begin to rise, the Federal Reserve usually adjusts interest rates to real in excess cash reserves stored within the economy.

What does this have to do with insurance premiums, though? Insurance companies usually invest the premiums that they collect into bonds. When interest rates are high, insurance companies can earn a higher return on their investment, and vice versa. Therefore, insurance companies stand to earn more from their investments when inflation rises.

How Inflation Affects Insurance Premiums

Now that we understand how inflation and interest rates are related, let’s take a look at how this affects insurance premiums. In short, when inflation is high, insurance premiums usually go down, and vice versa. When inflation is high, insurance companies can earn a higher return on their investment, which means that they don’t have to charge as much for premiums in order to make a profit.

In other words, high inflation rates lead to lower insurance premiums. Conversely, when inflation is low, insurance companies earn a lower return on their investment, which means that they have to charge more for premiums in order to make a profit. I.e., low inflation rates lead to higher insurance premiums.

So, what does this mean for life insurance policyholders? In the short term, policyholders may see their premiums go down as inflation rates continue to rise. In the long-term, however, policyholders may see their premiums go back up as regulators real in the economy and insurance companies readjust to lower interest rates.

Policyholders may also see their death benefits go up as the cost of living goes up. This is because most life insurance policies have a provision that protects against inflation. This provision is known as the “cost of living rider” or the “COL rider.” It’s put in place to maintain the value of the policy and protect customers against sudden jumps in the price of consumer goods.

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The Bottom Line
Inflation is generally viewed as a bad thing. Yet, for life insurance policyholders, the benefits of inflation usually outweigh the downsides. In the short-term, insurance companies usually stand to profit from their investments and policyholders see the benefit as their premiums drop. However, once inflation comes back under control, their premiums may return to normal.

What Are a Few Common Life Insurance Mistakes?

Purchasing life insurance can seem a bit daunting for individuals who are not fully aware of the options available to them. To this point, without the direction of an agent that is empathetic and aware of their current and future needs for life insurance, there are several pitfalls that consumers could fall victim to. PHP Agency realizes that becoming educated on some of the common mistakes that people make when exploring coverage options is important to ensure that we make the best decisions possible. Here, PHP Agency reviews a few of these mistakes and how potential consumers can best avoid them.

Waiting Too Long to Explore Options

Many people hold the misconception that life insurance is prohibitively expensive to purchase. This means that they may put off buying the coverage that they need. It is important to note that life insurance premiums are based on factors such as age and overall health and buying a life insurance policy while you are younger can help you secure a policy at a low cost. Those that wait to buy may find that their premiums are higher, as life insurance rates typically increase as people age and their health deteriorates over time.

Not Shopping Around for Rates and Policies

Prices in the life insurance space can vary widely depending on the level of coverage and what the options include, and consumers should certainly not limit their search to just one company. One company’s term insurance product could easily be more than double a competitor’s, and that does not mean that the higher priced coverage is inherently better or more fit to your situation. To get the best deal possible for your needs, it is recommended to shop around and hear from at least three companies for different coverage levels before deciding.

Purchasing Too Little Coverage

Not buying enough coverage is a common mistake in the life insurance space because some families underestimate their needs for insurance. After all, it takes a large death benefit to replace a breadwinner’s monthly income if their paychecks were to stop rolling in. It is recommended to ensure that your policy covers your lost income as well as potential bills such as funeral costs, the mortgage, education, and other expenses that you anticipate over the course of your children’s lives. By balancing comparing your current assets with your financial obligations, you can decide how much coverage will be needed to fill in the gap.

Buying the Wrong Type of Coverage

PHP Agency speaks to how each of us have individual needs for life insurance and there is no “one size fits all” option that can cover us all. For this reason, it is important that individuals purchasing life insurance fully understand the policies they are looking at. What does it cover? What does it not? How much are you required to pay? It is crucial to know the answers to all these questions and more early in the conversation. Even if you have the help of an agent to decide which policies would best fit your needs, you will need to remember that your needs may still change over the years. After significant life events that may change your insurance needs, go back and reassess if your current policy will still work for you.

What Life Events Can Change Someone’s Insurance Needs?

Life insurance is often an aspect of financial security that people put off. Even when they do not, many do not consider the possibility that they will need to change their level or type of coverage as their life situations change. PHP Agency realizes that this is a mistake as there are many life events that can impact someone’s insurance needs. Here, PHP Agency reviews a few of the most common reasons that people may evaluate (and potentially change) their insurance.


When couples marry, join a civil union, or become life partners, most likely both individuals work towards contributing to a household. This means that, should one person die, the other could quickly become responsible for handling many financial obligations. People typically evaluate their insurance needs when they find their life partner because such coverage could help the surviving partner maintain their quality of life and pay their financial obligations. Death benefits paid out through life insurance policies can be used for responsibilities such as mortgage, car loan, student loans, and debts.

Income Growth

Term covers are often based on a couple’s household income, which is meant to help support your family’s lifestyle after your death. Because of this, it is important to review and perhaps increase your health and term cover if you experience a significant income growth. Increasing the cover for health and life insurance plans can help ensure that your family has support in your absence, preventing damaging financial situations that could arise if your current coverage does not reflect your new income.

Purchasing First Home

Many couples prepare for purchasing a home for a while, and it can be daunting to evaluate everything that is needed to ensure financial stability should a partner pass away. After all, mortgage is more than likely a couple’s biggest debt, and insurance, property taxes, and upkeep certainly contribute to the costs of home ownership. Life insurance can help make sure that a surviving partner can afford to keep the home should an unexpected event befall their family. If there is no joint homeowner, life insurance can help make your property an asset for your loved ones rather than become a foreclosure.

Having Children

Having a child, either through birth or adoption, certainly changes a couple’s finances. Most parents will have a reflective moment where they realize that they must do everything possible to provide financial security and protection to their children. Life insurance is one tool that can help a parent ensure their children’s safety should the unexpected happen. Death benefits that are paid if life insurance needs to be used can be used to cover a child’s needs and help them maintain a financially secure future.


There are a lot of things that an individual should evaluate when it comes time to retire, and life insurance is no exception. One of the interesting things about evaluating insurance needs during retirement is that there are many different scenarios that will impact one’s needs. For example, some retirees see their permanent life policies as a potential source of retirement income source. Retirees with grown children and a partner with enough income may decide they no longer need their insurance policy. Others may wish to keep their life policy to help their heirs pay legal fees and taxes associated with their estate after their death.

PHP Agency Reviews What Job Candidates Look for in Company Insurance Options

PHP Agency Reviews what most people are looking for in a company’s insurance options. While some insurance companies offer a limited number of benefits, others offer the full load of insurance benefits. This is what more and more people are looking for in a company. The more benefits, the better their retirement looks for them. So, let us look and some of the most popular benefits candidates seek to find.

During the pandemic companies all over the world have lost employees or had to let go of their employees due to the lack of business. With that said, the unemployment rate fell to a record low of 4.3% this summer, leaving HR managers in a tough position to find quality candidates. Companies have had to learn how to innovate new ways to attract quality candidates. And one way to do that is to offer compelling company benefits. Offering competitive benefits package will help in acquisition and retention. Here is how they are doing just that…

Medical, Dental, and Vision Insurance. Most employers offer these types of insurance. This helps the employee take care of themselves and their family members. This one is a must for anyone who is looking for a salaried job. Unfortunately, health insurance can be the most expensive perk for an employer to offer. The good news is for small businesses, they can offer health insurance without bearing the cost of the entire premium. All they must do it pay a portion of the monthly premium to make their expenses more manageable. Any sort of insurance benefit an employee can get they will appreciate it.

Retirement Benefits. Offering a retirement plan can strengthen your employer brand and increase the number of applicants. Most companies offer a traditional 401k plan as an employee benefit. Retirement plans are a popular employment benefit since both business owners and the employees gets tax breaks whenever they make contributions.

Wellness Programs. More and more employees are taking care of their health and being mindful of their overall wellbeing. Since this has become such a hot topic these days, companies have decided to offer wellness programs as part of their benefits package. This would provide the employee, healthy snacks, yoga classes, discounts to a gym membership, and even mediation classes to name a few. Corporate wellness is increasingly being viewed as a key component to company success.

While companies struggle to find top talent, many are looking at their benefits package and insurance options to attract candidates. Research shows that competitive perks can be the best way to gain more top talent. These top candidates are looking for flexible schedules, health care insurance, retirement planning, life insurance, and wellness programs. Offer these benefits and you will find your top talent.

PHP Agency Reviews What New Parents Should Look for In a Health Insurance Plan

PHP Agency Reviews what new parents should know to look for when choosing a health insurance plan. Being a new parent is an exciting moment. There are all sorts of things that are going that you as a parent are making sure gets done the right way. One of those things is choosing a health insurance plan that is right for your baby. Deciphering health plans for your baby is not fun, but here are a few ways to navigate through your company’s health plans to make sure you are picking the right one for your family.

Begin by evaluating both parents’ coverages. Before anything else, investigate you and your partners healthcare coverages. Especially if you both get covered through your place of work. Pay attention to the different coverage tiers of the plans because some plans allow you to cover just yourself and one dependent, either a child or a spouse; others might require coverage for the whole family. “In some instances, it may be worth having two separate policies. If both parents are on the same policy, then adding a child can sometimes turn the policy into a family policy at a much, much higher cost,” says insurance agent Greg Sanders.

Look at the total cost of a given plan, not just the monthly premium. When you weigh the pros and cons of a plan, be sure to add in copays, deductibles, and all other medical fees that you are likely to have with a particular plan. Also be sure to factor in any possible visits made to the urgent care or the emergency room as well as lab tests and prescriptions. Finally, when it comes to out-of-pocket costs, you will want to consider if the pediatrician you would like to use and a nearby hospital are in-network, in case of emergency. Out of network can potentially cost more out of pocket money.

Consider enrolling in your companies flexible spending account plan for dependent care. If you know that you will need childcare, consider using a Dependent Care Flexible Spending Account (FSA) to get a break on the cost. FSAs are a use it or lose it type of account. If you know you are not going to have your baby that year, you might consider contributing less than if you had your baby before the time the years FSA ran out. Health Saving Account (HSA) is if you have a higher deductible, which you can contribute up to a certain amount of your pre-tax dollars. This money can be taken out tax free as long as it goes towards eligible medical expenses. While various health-care items are included, keep in mind that everyday costs like childcare, formula, or diapers are not considered medical expenses, it is important to know what is covered before deciding if an HSA is right for you.