Using Insurance to Protect and Grow Business Value
Insurance professionals may not always be seen as the first stop for business owners seeking long-term guidance—but their deep, ongoing client relationships uniquely position them to lead impactful conversations. Through business planning, insurance advisors can go beyond product placement and begin uncovering business owners’ personal, financial, and strategic goals. By using frameworks like Owner Based Planning, insurance professionals can identify planning gaps, initiate value-building strategies, and align their services with both business continuity and future growth.
With Owner Based Planning, insurance advisors can shift from product-centric service to strategic partnership—helping owners align business performance with personal and financial priorities, while laying the groundwork for future success and continuity.
Three Core Responsibilities of the Insurance Advisor
As part of the business owner’s advisory team, insurance professionals bring critical value by:
- Educating the owner about planning strategies that support long-term business and personal goals.
- Facilitating collaboration with the owner’s broader advisory team.
- Delivering solutions that protect and promote business value and family security.
Owner Based Planning empowers insurance professionals to lead with questions about the owner’s vision for the business—rather than waiting for retirement or transition planning to emerge.
Step One: Understanding Owner Goals
Begin by helping the owner define income needs—during their lifetime, at retirement, and in the event of disability or death. These discussions are foundational in OBP, which emphasizes planning around the owner’s values and future aspirations.
Step Two: Evaluating Business Value and Risk in Insurance Advisor-Led Business Planning
Support the valuation process for insurance, estate, or gifting purposes. Identify income deficiencies and coverage gaps that could impact the owner’s family or business in unforeseen circumstances. This risk-based insight adds immediate value, even if a transition isn’t on the horizon.
Step Three: Preserving, Protecting & Promoting Value
Insurance advisors play a direct role in strengthening business value through protection strategies. This includes:
- Advising on retention and incentive tools such as non-qualified deferred compensation plans.
- Assessing the need for retirement-focused plans like defined benefit solutions.
- Recommending and implementing key person life insurance for the business owner and top employees—safeguarding continuity in case of sudden loss.
Key person coverage is especially critical when a business’s value is tied to the contributions of specific individuals. It ensures that the business can absorb the financial impact of losing a key employee, fund temporary leadership, or support recruiting efforts—helping the company maintain momentum during a difficult transition.
Carriers like Pacific Life offer a range of planning solutions, advanced markets support, and executive benefit solutions that empower insurance professionals to deliver more value through business planning. These resources can enhance your ability to support owners with strategies like deferred compensation, key person coverage, and retirement income planning.
Step Four: Preparing for Future Liquidity Events
Even if a sale or succession is years away—or uncertain—insurance professionals can help assess whether the business is on track to meet the owner’s eventual financial goals. Owner Based Planning encourages earlier, broader conversations that focus on readiness, not timelines.
Step Five: Planning for Business Transitions with Advisor-Led Insurance Solutions
In insider transitions (e.g., to children, co-owners, or key employees), insurance professionals help:
- Fund Buy-Sell Agreements between the owner and future stakeholders.
- Provide key person insurance on those acquiring ownership to secure the business’s value during and after the transfer.
- Assess income needs for the owner and family in the event of death prior to a completed transition.
More Owner Based Planning recommendation examples.
This level of planning ensures that if anything happens to a future owner or the current one, the business remains stable and the owner’s financial goals stay on track.
Step Six: Insurance Advisor-Led Business Continuity & Contingency Planning
Help review and update Buy-Sell Agreements, recommend Stay Bonuses for key employees, and ensure contingency plans are consistent with the owner’s broader goals. These strategies are vital for both single-owner businesses and multi-owner enterprises—and often overlooked until it’s too late.
Step Seven: Family Wealth and Estate Planning
Review the owner’s estate plan to ensure it aligns with current business structures, valuation realities, and personal goals. Insurance funding can help cover estate taxes, enable wealth transfer, and ensure financial security for future generations.
Connecting Insurance Advisor Strategy to Business Owner Goals
Through Owner Based Planning, insurance professionals become more than policy providers—they become trusted guides in long-term planning, value creation, and legacy protection. You don’t have to wait for an owner to ask about leaving the business. By leading with thoughtful questions and strategic insight, you help them build a stronger business today—and a more secure future tomorrow.
Learn how to bring Owner Based Planning into your insurance advisory approach.
