Tuesday, April 10, 2018

Own A Small Business? You Need Life Insurance

When it is time for you to look at purchasing a life insurance plan, there is more to think about than just your family – especially if you are a small business owner. You have employees, clients and customers depending on you. If you died unexpectedly, your business could be in turmoil and end up falling apart.

Life insurance is more than just providing peace of mind. You are building a plan for those who rely on you for their future. Children, spouse, parents and anyone involved in your business depend on you and your success. Without you, who knows what could happen to them.

So as you search for the top 10 life insurance companies in the United States, here are some points to take into consideration before buying.

Your Family Depends on It.

As a business owner, more than likely your family is depending on that source of income. That money pays the bills, buys kids presents and helps save for retirement. Even if you have additional sources of income, chances are, your small business is providing a substantial stream of income.

Now picture your family without that money. Could they make ends meet? Would they be able to keep up with bill payments or end up having to sell the house? Would the retirement be depleted just so your family could live their day-to-day lives?

Unless your family is groomed to take over the business if you were no longer able to run it, your death could be detrimental financially to your family. They may have to sell the company quickly which may not always work in their favor.

Getting a life insurance policy that covers the loss of income in the result of your sudden death will help keep your families future alive. On top of that, if you used family assets to back up loans for your business, your insurance policy would be able to cover the loan payments.

Your Business Depends on It.

If you own the business, many people rely on you. Whether it be clients, customers, staff or a partner, you play a significant role in keeping that business running. Without you, your company could fall apart.

Do you have particular employees that you need to run your business? Those people in which you think if they were no longer around, it would throw the company into a state of chaos until we find their replacement.

There are two types of life insurance policies a business owner should consider:

  • Buy-sell agreement – this type of insurance is a contract made between business owners or partners. If one of the owners suddenly passed away, the insurance policy would kick in to cover the predetermined cost of purchasing the deceased’s shares. You are protecting yourself from the deceased owner’s family from trying to take control of the business.
  • Key person insurance – If you have that critical employee in your business that you need, this insurance policy is for you. If required, the policy provides necessary funds to help cover the gap replacing the employee, along with any costs in the result of the death.

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