The Business Owner Plan Check
About ten short questions tell you whether most owners in your position set up a will or a living trust, or should see an attorney first, and estimate the life insurance that would pay for the plan. Every number comes with the arithmetic behind it.
How the estimates work
- Personal coverage adds your debts, your mortgage, your income for the years your family would need it, education for each child under 18 and final expenses, then subtracts life insurance you already own. That is the DIME method.
- Key person coverage is 5 to 10 times the person’s annual pay, a common rule of thumb. Carriers set the real maximum from the business’s finances.
- Buy-sell funding is your ownership percentage times the business value range: the cash your partners would need to buy your share. Your agreement sets the real price.
- An attorney is recommended for an estate that could approach the federal estate tax exclusion, a beneficiary with special needs, a blended family expecting disagreement, assets abroad, or leaving out a spouse or child.
Estimates, not advice and not quotes. A licensed agent confirms insurance with real quotes; an attorney is the person to confirm anything legal.
Boring Insurance Agency is a licensed insurance agency, not a law firm, and does not provide legal advice. No attorney-client relationship is created by using this service. These documents are self-help forms prepared from the information you provide. Laws vary by state, and your circumstances may require changes these forms do not make. We recommend you have an attorney licensed in your state review your documents before you sign them.
Built by Kevin Kelsey, founder and principal agent, CA License #6011822. Estate planning for business owners.