The hardest part in working with business owners is getting them to purchase the life insurance they need. However,
once the buying decision is made, the next most difficult challenge may be getting the insurance carrier to issue the
amount applied for. Packaging the case is critical, particularly when large amounts are being requested. The following are
tips that can help you to best position your business insurance cases.
General Guidelines to Positioning the Case with the Insurance Carrier
It is always beneficial to submit a cover letter with supporting financial documentation that addresses all the
important and relevant information. At a minimum, the cover letter should state:
• The purpose of the insurance applied for
• The policy owner’s relationship to the insured, i.e., co-owner, employer
• Insured’s position in the business – owner, employee, both – and title
• How the requested coverage amount was determined
• How much insurance is currently in force
• What the purpose of the current coverage is and whether it will be a replacement
• How the business plans to “afford” the insurance if cash flow from operations is poor
Clearly identify the business purpose that the life insurance policy will serve. In the business market, the life
insurance sale generally falls within one of four basic uses: key person coverage, funding of buy-sell arrangements,
financing of executive benefit plans, or business loan protection. If the insurance is to cover more than one need,
make sure you identify all the intended purposes.
When applying for business insurance it is often important that you tell the business story. Don’t hesitate to use
the internet to search for information on the business, its owners, the industry outlook, etc. You may be amazed by
what you can find!
Business Insurance Checklists
Business life insurance concepts tend to require more documentation that a typical life insurance case. For example,
many business cases will need to comply with the notice and consent requirements of IRC § 101(j). To help you
understand the usual steps associated with establishing and maintaining the most common business insurance cases DBS
has created the several checklists. Visit our website to obtain these forms.
If you have questions regarding your business insurance cases, contact your dedicated Case Design Analyst or our inhouse
advanced case resource, Terri Getman, JD, CLU, ChFC, RICP, AEP (Distinguished) at ext. 230.