A Life Insurance Checklist for Small Business Owners
Life insurance can be a surprising benefit for small business owners. Whether you run an enterprise with many employees or are a one-person show, much is at stake. If you or an essential team member passes away unexpectedly, it can lead to severe financial stress or even shuttering a successful enterprise.
How Can Life Insurance Help Small Business Owners?
In the event of an untimely death, life insurance can help small business owners:
- Avoid liquidation
- Pay estate taxes
- Provide income for loved ones
- Continue delivery to customers
- Smoothly transfer ownership between partners
Types of Small Business Life Insurance Policies
Understanding these main types of business life insurance can help you make the right choice for your company.
Personal Life Insurance
The simplest form of insurance for small business owners with no employees is personal life insurance. If you provide the primary source of support for your household, an individual life insurance plan will likely be enough to cover your needs. When purchasing a policy, consider how much coverage will be required to manage your debts and provide living expenses for your family after you are gone.
Key Person Life Insurance
Key person life insurance protects a business when one of its vital employees passes away. Some small companies heavily depend on one or more staff members who fill a significant role in the company’s success. Examples include the lead programmer, a partner, a top salesperson, or the leading attorney in a family law firm. While these persons may feel irreplaceable, key person life insurance allows you to rebuild and cover the expenses incurred due to their passing, such as locating, hiring, or training a replacement and keeping the company viable during the transition.
Buy-Sell Agreement
A Buy-Sell agreement provides a clear map for management if an owner or co-owner dies, departs, or becomes disabled. The agreement lays out the smooth transition of power to the other partner or a key employee and allows them to buy out the deceased’s stake in the company. Ask your insurance agent about buying a policy for your partner and have them buy one for you. This way, when a partner or owner dies, the other has the funds to buy out your share of the company.
Group Life Insurance
Group insurance policies can be an effective way for small business employers to reduce their tax burden; some premiums paid by the company are tax-deductible as business expenses. As an added benefit, group insurance plans can help attract and retain top talent in the workforce.
Steps To Insure Your Small Business
- Determine the coverage you need.
- Choose a type of insurance.
- Get competitive quotes.
- Sign up with the best offer.
Protect Your Business and Your Peace of Mind with Life Insurance
Sometimes, getting a good grip on the available insurance plans is easier said than done. Our agents can help take the legwork out of the equation for you. We can offer you various options and competitive quotes from different plans, all in one place. Allowing you to take the vital step of deciding what works for you, your family, and your business. Call today to discuss your needs and get tailored quotes to help you protect your business and peace of mind.