Companies that inquire about business evaluations are usually looking to learn how much their company is worth – and find business solutions through life insurance. These solutions range from exit planning, business protection, transferring wealth to the next generation, and even retirement planning.
Recently, statistics have been released to help better identify the types of companies that typically inquire about business evaluations.
The resulting top five industries are:
- Professional, scientific, and technical services
- Manufacturing
- Construction
- Wholesale trade
- Retail trade
The statistics also revealed that these companies are mainly S&C corporations, with about 13% being private partnerships – and an overwhelming majority have about 1-99 employees with over 25 years in their respective fields. Half have an annual sales volume of $1-$3 million; 18% generate $3.1-$10 million, where 12% are reaching $10.1-$50 million in sales. Less than 3% do more than $50.1 million in sales.
When owners use the business evaluation process, results can lead to significant opportunity.
Related planning in the form of a Buy-Sell case results in an average case size of $11,301. Average case size for Key Person policies are $8,986. Executive Bonus cases average $28,756.
Some other interesting statistics advisors should be aware of are the percentages of businesses that successfully pass operations on from one generation to the next: 70% of first-generation operations do not successfully transition to the next generation. 90% of the second-generation do not make it to the third generation, and 96% of the third-generation do not survive to the fourth generation.
The purchase of life insurance policies on the owners’ lives can ensure there is enough money to pass along to the next generation, to successfully run and operate the business going forward. Or, if an owner has a child who has no intention of running the business, life insurance is a great solution to equalize this child’s inheritance, and help other family members who may be looking to take on the family business avoid any potential tension.
Please reach out to your Life Sales Marketing Manager to learn more about these statistics, and how life insurance is a critical part of the business planning process.

1 Comment
Hey Sean,
Like the article and the potential opportunity with businees owners and, particularly, these top 5 industries.
I was wondering if you had any specific marketing material in support of this opportunity and the statistics above? Finally, any kind of Needs Analysis available to assist agents, when meeting with prospects, to help get more information to assess the valuation of the company and the use of life insurance to pass the torch, if need be?