Your Business – What Happens When You Can’t Be There?
You’ve worked hard to grow your business; strong and thriving, many have come to depend on its continued success. What would happen if you or your business partner(s) suddenly passed? Could you ensure continued success? Your loved ones on-going security and comfort may depend on it, not to mention that of the team of people you employ. As a business owner, there are three types of life insurance to consider.
Individual Life
This coverage serves to protect your family. As you may already know, it will provide a continued income of some sort for your dependents in the event of your death. While I’m a firm believer that everyone should have life insurance, business owners may be especially susceptible to unique risks. For example, many small business owners will take out loans to support their business using personal assets as collateral. If you happen to have secured your business loan against your home, your family will be left to cover this debt, leaving them with an even bigger loss if the business can no longer be sustained.
Buy-Sell Insurance
If you have a partner, buy-sell insurance is a must. It allows you to buy the shares of the deceased co-owner at a predetermined price. This is important – in the event of the loss of a partner, ownership of the shares would likely fall in the hands of a family member. This person may not have the will or capacity to participate in the business effectively enough for you to continue operating, or they may choose to sell them; if you are out priced, you’ll risk losing significant control of your livelihood to an unknown entity.
Key Person Insurance
Lastly, consider key person insurance. If you employ someone who contributes significantly to the success of your organization, someone responsible for the majority of your business development, or who has a unique technical skill that your business is dependent on, key person insurance is a wise consideration.
The loss of this person could mean the loss of clients and vital networks that drive your business, not to mention the costs associated with searching, hiring, and retraining a suitable replacement. Downtime during this process could be detrimental.
Be prepared, start a conversation.
These are not easy discussions to have with your family or business partners, but planning ahead will make the tough times just a little easier in the event of a loss of life.
- If you don’t have a will already, get it done. Review it regularly as life events unfold, you may want to make changes.
- Discuss your plans for business continuity with partners and family, to ease transitions and mitigate loss.
- Talk to a financial planner to understand your options. No two businesses are alike; your advisor can help you tailor a solution that best suits your needs.
Need a financial advisor? I can help, send me a note and I’ll connect you with one of the knowledgeable advisors in the InsureMy network.
Have More Questions?
Let me know and I’ll do my best to address it here for you and all of our readers. Better yet, contact an InsureMy advisor; these guys know their stuff. Email Info@InsureMy.ca or give them a call locally at (403) 410-1896 or toll free at 1-844-410-1896.
Everyday Insurance With Allie
Working mom, lover of the great outdoors and self-professed know-it-all. Our resident blogger, Allie isn’t the insurance guru she claims to be – but she’s learning and we are happy to help guide her. All the while keeping you in the loop on the “insurancey” stuff you need to know. #AskAllie
