Term covers a set period, so it suits business needs that end, such as a loan or a key person’s working years. Permanent coverage lasts for life and can build cash value. It suits needs that last, such as funding a buy-sell agreement or passing on wealth, and the policy is an asset of the business that can be used as collateral for a loan. Many businesses use both. See also What distinguishes permanent from term life insurance?
What are the differences between term and permanent business-owned life insurance?
Reviewed by Garrett Agencies Ltd., October 2026. How we write
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More about business-owned life insurance
Life insurance held by the corporation, for funding obligations and planning ahead.
More questions about business-owned life insurance
- What is business-owned life insurance?
- Who should be covered by business-owned life insurance?
- How much business-owned life insurance coverage do I need?
- What are the tax implications of business-owned life insurance?
- What happens to a business-owned life insurance policy if a key person leaves the company?
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