People often think of life insurance as a family-centered insurance. Which it often is. But if you own a business, you should also consider life insurance as a smart business policy. Why? Let's explain.
Just as your family may feel the emotional and financial burden of your absence, your business partners, employees, beneficiaries and business growth may suffer from losing your position and expertise. Since your business is a charity, owners should also protect this asset.
Here are four other reasons why life insurance is so important for business owners:
- Income support for your family. A personal policy for life or full life can cover expenses for the end of life and secure the family's finances for things like childcare and the mortgage. It can also protect your business' success and future. If your family is dependent on your company's income, a policy would offer protection if they could not run it or sell it themselves. Or if they are in a position where they are forced to sell, it may give them time to look for the right offer instead of selling it fast for quick cash. Throughout this transition period, your family will have income for themselves and your business.
- Protection against safety damage. Do you rely on loans during the early business? Do any of these loans tie up personal property such as your home or financial assets? If something happens to you, the loans can be collected and leave your family in a serious situation. Calculate the coverage you may need against this security and take a personal policy to protect your family from this financial difficulty.
- Critical employee death. You have built a team you trust and depend on. But what if a significant employee suddenly dies? If you have a key personal insurance as a business owner, you would receive income to compensate for the loss of your team member.
- To appoint a successor. Do you own your business or have someone in mind to take the step and take the business? Business partners are one of the life insurance recipients you may not have considered. If you own your business together, create a buy-sell agreement that describes the terms of operation and transfer of power in your absence. Tip: Business partners / shareholders often buy insurance that corresponds to the shares of others.
Life insurance is a smart business strategy for large and small companies. Regardless of industry, it is important to protect the company's future with coverage. Not sure where to start or what you need? Talk to a local, independent business life insurance agent today.