My mother never told me running a small business was easy. In fact it went something more like, “wouldn’t you be better off getting a real job?” I wrote that in 2007, one of the first posts to this forum. I have been self employed since 1978, most of that in life insurance and she’s finally warming to the idea.
This post is a look back at that 2007 post with updates that reflect my continued education and changes in the economy and products.
the idea of business life insurance is certainly nothing new. Whether you are in business for yourself, or work for someone, your future can be in jeopardy if you, or they, have not adequately protected the business with business life insurance. when the owner or partner in a business wakes up dead one morning and there is no business life insurance such as a buy/sell insurance policy or key man insurance in place ti can be the beginning of very quick end to a lot of dreams.
We often think of life insurance just in terms of protecting our family from the loss of income if a parent should die, or in terms of final expense or burial life insurance. Especially when we get over 50 life insurance seems to take on a bit more meaning (wonder why?). The unexpected death of a business owner or key person can have a dramatic impact, not only on their family, but on the employees of the business and their families.
If you own a business and don’t currently have business life insurance, simply ask yourself, seriously, what happens if I die tonight? What business succession plan do I have in place that will ensure that either the business continues or everyone involved will be able to walk away with their fair share paid in full? Who am I leaving high and dry and broke if I don’t show up?
In most cases you will want to look at term life insurance rather than universal life or whole life. Why term life insurance? The truth is that most businesses change too rapidly to make locking in even the longer terms or permanent insurance. A more prudent approach is to look at each aspect of your business and consider the proper term length. It may take more than one life insurance policy, but with term insurance being as affordable as it is, you should certainly be able to protect your business without significant impact on your budget. There may be times like the last four years when you may want to just take out an extra short term policy just to make up for lost value.
So, mind your own business! The bailouts are all gone. A good steward of a business will ensure that the business will survive them or that at the very least everyone walks away with a fair shot at a future instead of a boatload of debt.
Bottom line. Since I originally wrote this post we’ve all seen things happen in the economy that just defy the imagination. Billions and Trillions are now numbers that people understand, at least in terms of debt. More people understand about having a home repossessed now than at any time in this country’s past. If you have any questions or need help in determining how to build a succession plan for your business, call or email me directly. Let’s talk.