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- When permanent life insurance is used, the business (as owner of the policy) has access to cash values during the life of the insured.
- Accumulated earnings tax will not accrue if life insurance is purchased to reasonably compensate the business for a loss.
- The business can receive an income-tax free death benefit upon death of the key person, thereby providing liquidity precisely when the need arises.
- Optional disability riders are available that waive premiums in the event of the insured’s total disability.
- A Business Exchange Rider may be used to substitute a new insured upon the key person’s retirement (subject to insurability).