In the business owner’s mind, the most common issue with owning a business is facilitating a decent profit to keep the business open and growing. However, a business can fail very quickly should the owner pass away or become severely ill. If you are a business owner, this is a very important event to consider. Your business could swiftly go belly up in the event of your demise.
Business life insurance helps to protect a company if something should happen to the owner. It allows the business to operate and keep its doors open, rather than falling victim to lack of management or bankruptcy. For many, a successful business is the sole income source for the business owner’s family. What will happen to your family, as well as your business, if you are unable to manage it and make ends meet?
This type of insurance will benefit a company in three main ways, all of which depending on the business type and the number of employees.
Expenses: When an insurance plan focuses on this particular aspect, the business would be covered as far as primary expenses go. This includes utilities and rent. If the main operator dies, this allows the business to keep going until the person who can take it over becomes established. Usually, this type of insurance is centered on smaller businesses, and some middle sized businesses. A good rule of thumb is any business with 5 employees or less would be an ideal fit for this insurance type.
Business Partner: In some cases, businesses are owned or operated by two or more people. When one of the owners or operators die or become severely ill, serious problems can arise within the business. This type of plan allows the surviving owner or operator to take over the deceased or ill partner’s side of the business, or allows him or her to buy their shares. There are many stipulations within these plans, however.
Key Individual: For this insurance, a business is covered should it happen to lose the most influential employee or owner within the business. This loss is usually due to death. However, it will also cover other unfortunate events, such as extreme illness and disability or accidents. Anything that may cause the employee or owner to forfeit their position within the business. A key person may be the one who is responsible for the most success within the business; from operations, to critical marketing, manufacturing, or services/skills. If the individual who is most responsible for the business’ success is unable to continue, the business will receive funds from this insurance type to employ someone to take over and ensure the business continues to succeed for a short time. It may also help to cover other expenses, depending on the fine print of the plan that is chosen.
If your business is not covered by this unique type of insurance, it is wise to compare a few plans and check out your options as an active business owner. This will help to protect your business, its legacy, and your family.
More info here lifeinsurance.org.uk