As an owner of a small business, your nearest and dearest are not the only people who depend on you. If you die suddenly, this can have a devastating impact on your partners and owners who are left behind. The last thing you want is for all your hard work to go to waste, so here are a few reasons why you should take out life insurance.
Why You Need It
If you have a family to provide for, they will depend on your business’s income in order to live. You may also have taken out various loans which were backed up by your family’s assets in order to run or grow your company, however, should you die unexpectedly, your family members may not have the right knowledge or expertise to oversee your business. What’s more, they may be unable to sell your company easily, which can result in them living without any income, or worse, they can potentially lose their property.
If you have business partners, your family may not be able to take over, and your partners may struggle to buy out your percentage of the company. In this instance, your family members may have to step in to help oversee your business, or have to sell it off completely. Lastly, your company may heavily rely on some employees whose deaths would have a serious impact on operations or earnings.
What You Need
In the scenarios listed, taking out life insurance can help to save your business, as well as protect your loved ones. However, you need to understand that there are various policies that each have different meanings. A personal life insurance policy would help your loved ones clear any debts that you have built up in your business, as well as cover day to day living costs after your passing. Taking this type of policy out would give your family some much needed time to work out what steps to take next with your business.
If your company is shared with several owners, you are able to combine life insurance policies with a buy and sell agreement on each partner. This agreement is made in the event of a death of a partner, while those who remain can buy out the deceased family’s portion at a price that was agreed previously. The life insurance that is taken out will pay for this buyout.
Another type of policy that you can take out is key person insurance. This type of insurance is used to protect against the passing of a highly important member of the business. If a key employee has died, the insurance will pay the owner or the owners of the company.
Finding Insurance
Now that you have an idea of the various types of life insurance policies available, the last step of the process is finding the right policy. No matter the size of your business, or your current health, disaster can strike at any time, so taking out life insurance sooner rather than later is strongly advised. Insurance Geek may be able to help you, and visiting their website at insurancegeek.com can provide you with information on the different types of policies that you may want to consider taking out.
Keeping your loved ones safe and protected is important. Should you die unexpectedly, the last thing you want is to leave your family in dire straits, therefore, taking out a life insurance policy can add an extra layer of protection, giving your loved one’s financial stability and security.
