Term vs Permanent Life Insurance for Business Risk: When to Use Which

Small business owners frequently get trapped in an ideological battle when buying life insurance for their companies. On one side, traditional retail brokers push complex, expensive permanent life insurance policies promising tax-free accumulation and lifelong coverage. On the other side, financial commentators yell at business owners to buy cheap term insurance and invest the difference in general stock market index funds. Both extreme positions miss the core operational reality of managing corporate risk. Life insurance is neither inherently good nor inherently bad; it is a financial tool designed to solve specific balance sheet problems.