Insurance is a form of risk management, so if your business has a risk that could be transferred to an insurance policy then it may be an option. As a business owner your families livelihood is linked to business income. Common risk for a business are loss of a key employee due to death, or the employee leaving and going to a competitor. Death of an owner, (shareholder, or partner). Either of these events would cause at least a temporary loss of revenue to the business. Business life insurance is often incorporated into a well planned business exit strategy as well. Proper planning is important when purchasing business life insurance to avoid unexpected tax issues.
If you own a business, you should ask yourself these questions....
A... Do i have a partner? If so, do I want to be partners with his spouse? If not.... Get a buy/sell life policy. This will ensure that you are able to continue to operate while still taking care of your deceased partner family.... ( or that your spouse is taken care of... if it's you )
B... Do you have business loans? Do you expect that your spouse will be able to keep up the business in your absence? Will business decline in your absence? Will you leave your spouse responsible for your business loans and accounts payable?
C... Do you have a family?... children?... mortgage?... Who is going to ensure that they don't have to give up all their dreams, on top of losing you?
Think of how you would feel in those last moments........ The feeling should be...
MY FAMILY WILL BE OK.... I'VE TAKEN CARE OF THEIR FUTURE.. MY LAST ACT OF LOVE IS FULFILLED
You absolutely need life insurance to protect your family and business. There are many kinds/variations of policies available, but most only pay if you die. I have both term and Indexed Universal Life products that pay you MONEY if you become seriously ill based on the severity and face amount you have. Call me at xxx-xxx-xxxx and I can tell you more.
Yes, as with everyone, they should have life insurance to replace income for their family if the pass away too early before they have built up retirement funds. Business owners should also consider a “key person” policy that the business pays for to allow the company to continue to function while it looks for a replacement of that key person if he or she should pass away. Both both cases, income by that person is replaced to keep the family and the business financially stable.
Here's my round-about answer. In any life insurance policy, there are 3 parties involved. The named insured, the person who pays the policy (payor), and the person who benefits from the policy (beneficiary). The insured and the payor can be the same person. The payor and the beneficiary can be the same person. But the insured and the beneficiary cannot be the same person. From knowing this, it begs further diligence to understand why this question singles-out business owners.
There are a whole lot of reasons why a business owner should have Life Insurance. I will give a couple of examples:
Most times the business is the sole provider of income for the owner's family. If something happens to the owner, where will the money to live on come from? Most owners want something in place to address this need.
Depending on the structure of a business, there may be multiple owners or stakeholders. If something should happen to one of them, what happens to the business? Will the surviving owners be in partnership/business with the surviving family members, and are they capable of handling that responsibility. A lot of companies set up a plan where Life insurance will buy out the other owner's share of the business if something should happen to them.
Let me know if you want to look at some specifics. On the whole I would say yes, but how much and what kind depends on the situation of the individual and the business.
Yes, absolutely, business owners should have life insurance. Buy-Sell agreements are necessary for businesses with multiple owners to avoid a portion of the business going to a spouse or child of an owner in the event of the death of one owner. Also, Key-Man policies are good for businesses with one or two "Key" employees that contribute the majority of revenue to a business to protect in the untimely death of that "Key" employee to protect lost revenues and contribute to the cost of hiring and training someone to take over the "Key" employees duties. Key-Man policies can also be used as a type of deferred compensation for those employees by utilizing cash values once the employee retires. We have an agent in your area that can help you develop a plan for your business. Let me know if we can be of any help to you. Richard Matheson-xxx-xxx-xxxx Ext 118.
Yes, it’s very important to have life insurance. Especially if you own a business, you want to protect your family, company and employees from debts and unexpected costs if you pass away.
David, you ask a very important question. Let's not put the cart before the horse. We should focus on determining the need first. Do you have a family? Are you the breadwinner? What would happen to the business and any ongoing income trails if you were to pass? Do you have a partner or a key employee that would look to acquire your shares of the business if you were to pass? What do your savings and assets look like? Are you coming into any future inheritance? These are just examples of questions that are vital to not only determine IF you may need life insurance, but what type of policy and how much coverage. We are inquisitive brokers and help our clients throughout the process. The word "insurance" does not do it justice. It is not what it is called, it is what it ultimately helps you accomplish. Fact is, if our clients walk away educated, regardless of a sale or not, we consider that a mission accomplished.
just because you are a business owner does not automatically create a need for life insurance. But if you borrowed money to fund the start up or you expect to always have a line of credit with an outstanding balance then you might want to cover that obligation. As the business grows, depending on the liquidity and type of industry your family, if you have one , may depend upon you income and so again a possible need for coverage. You may also have an individual working with you that due to his/her loss would create some financial disruption to the business so you may want to consider some key person coverage to indemnify the business to buy enough time to replace the services of this person and comfort clients and lenders that you have have enough liquid capital on hand to bridge this gap
so long answer to your yes or no question...maybe
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Insurance is a form of risk management, so if your business has a risk that could be transferred to an insurance policy then it may be an option. As a business owner your families livelihood is linked to business income. Common risk for a business are loss of a key employee due to death, or the employee leaving and going to a competitor. Death of an owner, (shareholder, or partner). Either of these events would cause at least a temporary loss of revenue to the business. Business life insurance is often incorporated into a well planned business exit strategy as well. Proper planning is important when purchasing business life insurance to avoid unexpected tax issues.
If you own a business, you should ask yourself these questions....
A... Do i have a partner? If so, do I want to be partners with his spouse? If not.... Get a buy/sell life policy. This will ensure that you are able to continue to operate while still taking care of your deceased partner family.... ( or that your spouse is taken care of... if it's you )
B... Do you have business loans? Do you expect that your spouse will be able to keep up the business in your absence? Will business decline in your absence? Will you leave your spouse responsible for your business loans and accounts payable?
C... Do you have a family?... children?... mortgage?... Who is going to ensure that they don't have to give up all their dreams, on top of losing you?
Think of how you would feel in those last moments........ The feeling should be...
MY FAMILY WILL BE OK.... I'VE TAKEN CARE OF THEIR FUTURE.. MY LAST ACT OF LOVE IS FULFILLED
You absolutely need life insurance to protect your family and business. There are many kinds/variations of policies available, but most only pay if you die. I have both term and Indexed Universal Life products that pay you MONEY if you become seriously ill based on the severity and face amount you have. Call me at xxx-xxx-xxxx and I can tell you more.
Yes, as with everyone, they should have life insurance to replace income for their family if the pass away too early before they have built up retirement funds. Business owners should also consider a “key person” policy that the business pays for to allow the company to continue to function while it looks for a replacement of that key person if he or she should pass away. Both both cases, income by that person is replaced to keep the family and the business financially stable.
Here's my round-about answer. In any life insurance policy, there are 3 parties involved. The named insured, the person who pays the policy (payor), and the person who benefits from the policy (beneficiary). The insured and the payor can be the same person. The payor and the beneficiary can be the same person. But the insured and the beneficiary cannot be the same person. From knowing this, it begs further diligence to understand why this question singles-out business owners.
David,
There are a whole lot of reasons why a business owner should have Life Insurance. I will give a couple of examples:
Let me know if you want to look at some specifics. On the whole I would say yes, but how much and what kind depends on the situation of the individual and the business.
Eric
Yes, absolutely, business owners should have life insurance. Buy-Sell agreements are necessary for businesses with multiple owners to avoid a portion of the business going to a spouse or child of an owner in the event of the death of one owner. Also, Key-Man policies are good for businesses with one or two "Key" employees that contribute the majority of revenue to a business to protect in the untimely death of that "Key" employee to protect lost revenues and contribute to the cost of hiring and training someone to take over the "Key" employees duties. Key-Man policies can also be used as a type of deferred compensation for those employees by utilizing cash values once the employee retires. We have an agent in your area that can help you develop a plan for your business. Let me know if we can be of any help to you. Richard Matheson-xxx-xxx-xxxx Ext 118.
Yes, it’s very important to have life insurance. Especially if you own a business, you want to protect your family, company and employees from debts and unexpected costs if you pass away.
David, you ask a very important question. Let's not put the cart before the horse. We should focus on determining the need first. Do you have a family? Are you the breadwinner? What would happen to the business and any ongoing income trails if you were to pass? Do you have a partner or a key employee that would look to acquire your shares of the business if you were to pass? What do your savings and assets look like? Are you coming into any future inheritance? These are just examples of questions that are vital to not only determine IF you may need life insurance, but what type of policy and how much coverage. We are inquisitive brokers and help our clients throughout the process. The word "insurance" does not do it justice. It is not what it is called, it is what it ultimately helps you accomplish. Fact is, if our clients walk away educated, regardless of a sale or not, we consider that a mission accomplished.
just because you are a business owner does not automatically create a need for life insurance. But if you borrowed money to fund the start up or you expect to always have a line of credit with an outstanding balance then you might want to cover that obligation. As the business grows, depending on the liquidity and type of industry your family, if you have one , may depend upon you income and so again a possible need for coverage. You may also have an individual working with you that due to his/her loss would create some financial disruption to the business so you may want to consider some key person coverage to indemnify the business to buy enough time to replace the services of this person and comfort clients and lenders that you have have enough liquid capital on hand to bridge this gap
so long answer to your yes or no question...maybe