Term life insurance can offer protection for a small business and its owners in surprising ways. If you own a small business, you probably pay property and liability insurance, and are protected against fire, theft, flood and other disasters. But what would happen if you or one of your key employees was suddenly unable to work due to disability - or death? If something happens to you or one of your partners, what happens to your business? Who will pay outstanding business loans and other obligations?
That's where term life insurance comes in.
As your company grows, there are very likely to be one or two key people without whom you'd find it difficult to function. Besides you, there may be an accountant who understands the books inside and out, or the sales manager who drums up most of your sales. By taking out a term life insurance policy on each of those people, you can insure your company against the losses it would inevitably face if one of them were to become unable to work because of death or disability.
Why term life insurance? Especially for a young company, the lower premiums and limited term of coverage make more sense. As the company grows and becomes more stable and successful, a term life insurance policy can often be converted to a whole life key person policy - a life insurance policy that is specifically designed to cover the loss of a key person in an organization.
A term life insurance policy can also be used to cover partners in a business who agree to a buy-sell arrangement. In this case, if one partner dies, the death benefit is used as a 'buyout' to purchase his half of the company from the family. That way, the family of the deceased partner isn't stuck with a business in which they have no interest, and the surviving partner isn't forced into accepting the family as a partner.
Sometimes term life insurance isn't the best option. A whole life policy, for instance, allows you to use your investment in the policy to finance and fund projects, can help provide the basis for a retirement plan, or provide a cushion for the business to borrow against for expansion.
Whether you choose whole life or term insurance, though, key person insurance is a protection that your company shouldn't be without.
To view our list of recommended Life Insurance Companies, visit this page: Recommended Life Insurance Companies.
Carrie Reeder is the owner of eZerk, an informational website with articles and the latest news about various topics.
Auto insurance rates will vary depending on the insurance agency,... Read More
Only 61% of adult Americans have life insurance (down from... Read More
Life insurance quoteThank goodness John took his life insurance quote... Read More
The Health Savings Account (HSA) is an amazing tool to... Read More
Trying to save money wherever you can is important to... Read More
Many economists have suggested and recent economic data indicates that... Read More
Boat insurance is necessary for all boat owners who live... Read More
If you've been out of school for a couple of... Read More
The Terrorism Insurance Act of Nov. 26, 2002. This helps... Read More
For over 30 years I have been representing injured workers... Read More
Your friendly, neighborhood life insurance agent is most likely to... Read More
A new financial tool is now available for senior citizens.... Read More
The phrase "BUY TERM AND INVEST THE DIFFERENCE" evolves around... Read More
Several key changes are necessary to get control of the... Read More
Whether you are self-employed or a small business owner, finding... Read More
Let's be realistic, everyone needs to have auto insurance. Aside... Read More
Life insurance, whether you need term or whole life, can... Read More
There are times when you'll find yourself temporarily without health... Read More
How many times have you seen people whose life was... Read More
For most people car insurance is a the single largest... Read More
Here is a useful guide to life insurance. Simply put,... Read More
Term insurance and permanent insurance are two basic types of... Read More
When deciding on the appropriate amount of homeowner's insurance coverage... Read More
Although car insurance is compulsory, it's not necessary to pay... Read More
Did you realize that it could cost you more than... Read More
Finding insurance quotes for California auto is now pretty easy.... Read More
Renter's insurance is protection intended for anyone who rents an... Read More
Protecting your family is the single most important thing any... Read More
Our money saving auto insurance tips were written for one... Read More
Insurance is an important part of our lives. If you... Read More
If you are in the market to purchase your own... Read More
At first glance, homeowners insurance may seem perplexing and quite... Read More
How do you put a value good health? For many... Read More
California high risk truck insuranceIf your are in need of... Read More
What is health insurance and why do I need it?... Read More
Shopping for life insurance quotes for adult children isn't any... Read More
With Nursing home Cost's running $4,000 to $6,000 a month... Read More
No doubt most readers will have heard of the Northern... Read More
One of the most important benefits employed people enjoy is... Read More
Do you love someone deeply enough to spend your hard... Read More
Everything is big in Texas and so it is with... Read More
Here is a useful guide to Home Insurance. Home insurance... Read More
A recent survey took the most popular type of home... Read More
Regardless of what some people might think, medical insurance will... Read More
As a young, healthy college student, it might be tempting... Read More
There are 6 different types of homeowners insurance in general... Read More
You will find that your lender will insist that you... Read More
Because of the many problems that can occur when you... Read More
The phrase "BUY TERM AND INVEST THE DIFFERENCE" evolves around... Read More
According to a study by LifeSearch, the number of women... Read More
Life insurance, whether you need term or whole life, can... Read More
Business Owners Policies for the Self-EmployedWho needs a business owner's... Read More
A "Life Settlement" is a lump sum settlement paid to... Read More
Life insurance is a personal insurance plan designed to pay... Read More
We have just had the first year's anniversary of the... Read More
If you decide not to do a car insurance comparison... Read More
Everyone is searching for a way of cutting costs, a... Read More
Aren't all travel insurance plans basically the same?No. When you... Read More
Life Insurance is a legal contract between you and a... Read More
There are DOZENS of insurance claim possibilities which will increase... Read More
Most people want lower insurance costs but are often too... Read More
A question you might ask yourself is: why must we... Read More
Quite often you feel that an ad for life insurance... Read More
Life insurance can be a very scary thing. If you... Read More
An automobile accident can be a terrifying event for anyone,... Read More
For once finances seem to be going in favour of... Read More
Insurance |