Business Life Insurance – Key Person & Buy-Sell Plans
Protecting Your Business with Life Insurance
If someone critical to your business passed away unexpectedly, what would happen next? Business life insurance gives companies across Michigan—from local shops in Sparta to growing firms near Grand Rapids—a way to prepare for the unthinkable. At Quality Choice Insurance, we help employers and business owners put life insurance to work—whether it’s protecting against the loss of a key person, funding a buy-sell agreement, or offering valuable employee benefits.
As an independent life insurance agency, we’ll work closely with you to design the right strategy based on your company structure, goals, and budget. Our plans are tailored to help businesses preserve operations, maintain ownership continuity, and support their teams.
Key Person Insurance – Protect Your Business Backbone
Key person insurance (sometimes called “key man insurance”) is a life insurance policy a company takes out on a vital individual—typically an owner, top executive, or someone with irreplaceable skills. If that person dies, the business receives the death benefit to help manage the loss.
This money can be used to:
- Cover lost revenue during transition
- Recruit and train a replacement
- Reassure creditors, vendors, or investors
- Keep operations stable
We’ll help you determine who qualifies as a key person, estimate financial impact, and find a policy that fits your business size and structure.
Buy-Sell Funding – Keep Ownership in the Right Hands
If your business has two or more owners, a buy-sell agreement spells out what happens if one dies or exits. Life insurance is a smart way to fund that plan—ensuring that surviving owners can buy out the deceased owner’s share from his or her family without borrowing or dipping into operating cash.
We’ll work with you and your legal or financial adviser to:
- Ensure policies align with the written buy-sell agreement
- Structure ownership and beneficiaries correctly
- Determine the right policy type and coverage amount
This helps prevent disputes and ensures your business can continue under its intended leadership.
Group Life Insurance for Employees – A Valuable Benefit
Offering group life insurance is a simple, appreciated benefit that shows employees you care. Many employers in Michigan include a $50,000 base policy or 1x salary as part of their benefit package. Optional add-ons may let employees buy additional coverage at discounted rates.
Benefits of group life include:
- No medical exam for base coverage
- Portability in some cases
- Helps attract and retain talent
- Affordable for employers with 2+ employees
QCI can integrate group life into your employee benefit package—whether you already offer health insurance or are just getting started. We’ll make sure the plan fits your goals and budget.
(See our Group Health Insurance page for more on full benefits packages.)
Executive Life & Incentive Strategies
Looking to retain top executives or offer creative compensation solutions? We can also help set up:
- Executive bonus life insurance plans (where the business pays for individual policies as a bonus)
- Deferred compensation funding using permanent life insurance
These strategies help reward and retain leadership without changing ownership or payroll structures.
Expert Guidance for Business Owners
As a business owner, you wear a lot of hats—but figuring out the right insurance solution shouldn’t be one of them. Whether you're a family-run company in Muskegon or a larger firm with multiple partners in the Grand Rapids area, we’ll tailor a life insurance strategy that supports your business goals.
We’ve helped Michigan businesses protect their futures for decades. Let us help you do the same.
FAQs About Business Life Insurance
What is key person life insurance and who should get it?
Key person insurance is for anyone whose loss would cause major disruption to your business. This could be an owner, partner, top salesperson, or technical expert. The business owns the policy and receives the payout.
How does life insurance fund a buy-sell agreement?
Each owner carries a policy on the other(s). If one dies, the benefit funds the purchase of their share from heirs. This allows the business to stay in the hands of the surviving partners.
Can we offer group life insurance to employees tax-free?
Yes, the first $50,000 in employer-paid group life coverage is generally tax-free to the employee, per IRS rules. We’ll help you structure your plan to stay compliant.
Do we need to offer health insurance to provide group life?
No, life insurance can be offered as a stand-alone benefit. It’s a great option even for smaller businesses that aren’t ready to offer full health benefits yet.
What does corporate-owned life insurance mean?
It refers to a policy where the business is both the owner and beneficiary. This is typical in key person or buy-sell arrangements. We’ll explain when and how to use this properly.
Secure Your Business – Schedule a Consultation Today
Want help with key person coverage, partner buyout planning, or employee life benefits? Contact Quality Choice Insurance for a free consultation. We’ll review your needs, explain your options in plain English, and work alongside your other advisers to put the right plan in place.