Life insurance has many uses personally and for business.   Personally it can be used as protection against premature death, for tax-free accumulation for retirement, for loans for buying items such as cars, charitable giving to your favorite charity, and many others.   From a business standpoint, life insurance is used to secure loans, set up buy-sell arrangements, key-man protection, deferred compensation, and loan money to the business for expansion, etc.

It is important to understand how to use life insurance, so you can maximimize the value to you, your family and your business.   The most common use is to buy a term policy that will cover you in the event of your untimely death.   This policy can be used to provide income replacement to your family or buy your partner out in a buy-sell arrangement.   Term is often used for court ordered life insurance decrees, key-man insurance and to function as a loan guarantee.   When you start using cash-value products like whole life and universal life, there are even more creative uses.   The internal build up inside of the policy can be used as an incredible supplemental piece to your retirement.   The money grows on a tax deferred basis, and can be accessed on a tax-free basis if done correctly.   The internal buildup is also a great fund to draw upon as you go to borrow against to buy new cars, invest elsewhere, etc.   Cash value life insurance is also commonly used as the mechanism for deferred compensation for companies with its leverage and tax-advantage.   There are many other uses that I am not mentioning, but this shows the tremendous flexibility of these products.