What happens to your business if you or a key partner dies tomorrow? A properly structured life insurance plan keeps your business alive, your partners protected, and your family secure.
Business owners use life insurance for very different reasons than individuals. Here are the most common structures Tower Hill builds for Texas small businesses.
Business owns the policy and receives the death benefit. Used to cover revenue loss, replacement costs, and business debt if a critical employee or owner dies.
Each partner insures the other. Death benefit is used to fund the buyout of the deceased owner's share — keeping the business in the hands of surviving partners.
Covers outstanding SBA or commercial loans that an owner personally guaranteed. Prevents the surviving family from inheriting business debt.
Employer funds a life policy for a key executive as part of a compensation package. Can be structured to transfer to the employee after a vesting period.
Tower Hill can structure policies where the business is both owner and beneficiary — the correct setup for key person and buy-sell applications.
Tower Hill carrier network's accelerated underwriting approves most business owners for up to $1M without a medical exam. Coverage in days, not months.
Tower Hill holds TX Agency License #2608479TX. Our advisors understand Texas business law, buy-sell structuring, and community property considerations.
Key person insurance is a life policy owned by the business on a critical employee or owner. If that person dies, the death benefit goes to the company — providing capital to recruit a replacement, cover lost revenue, pay off business debt, or give surviving partners time to restructure.
A buy-sell agreement is a legal contract that determines what happens to an owner's interest if they die, become disabled, or exit. Life insurance funds the buyout — allowing surviving partners to purchase the deceased owner's share from their estate at a pre-agreed price, preventing outside parties from inheriting a stake in the business.
Key person insurance premiums are generally NOT deductible when the business is the beneficiary (IRS rules). However, death benefits are typically received income-tax-free. Buy-sell policies may have different treatment depending on structure. Consult your CPA — Tower Hill advisors work alongside your financial professionals.
Common formulas: (1) 5–10× the key person's annual compensation; (2) the cost to recruit and train a replacement plus estimated revenue loss during transition; or (3) the outstanding business loan amount the key person personally guaranteed. Most small TX businesses carry $250K–$2M per key person.
Yes — "key man" policies can be structured so ownership and beneficiary transfer to the individual if they leave the company. This turns the policy into a portable personal benefit. Our advisors can help structure split-dollar or executive bonus arrangements.
All Tower Hill policies are issued with top-rated carriers carrier partners — an A++ (Superior) A.M. Best-rated carrier with 165+ years of history. Tower Hill carrier network is licensed in all 50 states and maintains strong financial ratings. Your business's coverage is backed by one of the most financially sound carriers in the industry.
Every Texas business owner should have a written answer to "what happens if I die tomorrow?" Let's build yours. Free consultation, zero pressure.
Tower Hill Corp · TX Agency License #2608479TX · Carrier: Tower Hill carrier network Insurance Co.