Who buys term life insurance?
• Families buy term life insurance for security. If the insured dies, their term life insurance policy provides money to pay for home expenses, college, outstanding loans and other major expenses • Small Business Owners use term life insurance as a low cost debt protection to cover notes, lease obligations, business real estate mortgages and other expenses. • Business Partnerships use term life insurance to buy out partners in the event of their death. The deceased partner s beneficiary gets the insurance proceeds and the ownership of the company is then transferred to the remaining partner(s). • Corporations use term life insurance as stock purchase redemptions. For example, the corporation gets the insurance proceeds and buys back the stock from the deceased’s beneficiary, normally the surviving spouse or estate.
