The 5 Most Common Life Insurance Mistakes Small Business Owners Make

The most frequent error small business owners make when setting up life insurance is commingling personal estate needs with corporate risk management. Founders routinely attempt to save administrative time or money by purchasing a single personal life insurance policy to cover personal household debts, corporate bank loan guarantees, and partner equity buyouts. Alternatively, they buy a corporate key person policy and name their surviving spouse directly as the primary beneficiary. Both approaches create dangerous tax traps and ruin asset protection barriers.