For those of us who own businesses at some point the question pops into our mind, “what happens to the company when I die”? If it doesn’t cross our minds, I assure you it will cross your spouse’s mind and at least the mind of the employees who consider it a career more than a job. If we care about the continuation of the company we consider that question with a business succession plan and while mourning may be appropriate, there is no fear.
Let’s consider a few of the pot holes that lie just up the road when the owner, CEO or a key person in the company dies without some sort of business succession plan in place, a plan usually best backed by business life insurance.
- Almost always the reputation of the company rests with one or two key people. The unexpected death of one of those “key people” can shake the confidence of the company customer base and leave the wondering if doing business will change. Historically there is a drop in confidence that leads to a drop in sales. Most of us are not on the same level as Steve Jobs, but to say that confidence in Apple took a beating when he died would be an understatement.
- In most businesses the CEO is the one who signs on the dotted line (were they ever really dotted?) for business loans, and most lenders require that the CEO have loan collateral life insurance. The banks recognize that a debt free company is more likely to survive the loss of the person in charge and, of course, they know if the loan is still outstanding and the company falters or fails they stand to lose all or part of their investment.
- Companies often under estimate the importance of other key people. It can be as simple as the shipping manager who has grown the company reputation by getting every shipment right and on time for the last 20 years. Customers notice any change in your service and it is a fickle business world out there. They aren’t going to stay with you out of memory for the person that made your company efficient. They are going to stay because it remains efficient. A key person life insurance policy can provide the funds to hire a top notch replacement or creatively used to reward your customers for their loyalty by giving them discounted shipping while the transition to new leadership is completed.
- Replacing a key person who, by default, has become the ambassador of integrity, honesty and fairness for your company, whether that is the CEO, COO, CFO or your best sales executive can be a stumbling block of enormous proportions if the company doesn’t have access to business life insurance proceeds to help get through it. The death of someone who is considered key to the company success makes going to bank for help almost impossible where life insurance proceeds are delivered in a timely manner and there is no pay back required.
And if it was all the simple more companies would do it. What I have found is that a large number of CEO’s and Executives have problems getting the life insurance they need to provide for collateral business loan life insurance, key person life insurance or buy/sell life insurance. Many find out in the very final stages of a loan or a business deal that requires the life insurance and they are stuck. Deals and loans are lost and companies hurt because of it. We have the solution in a company that will provide the life insurance and they will do it usually in no more than a 5 business day turnaround.
Bottom line. We can create an affordable business life insurance buffer for your business to address collateral requirements or business succession plans and we can provide it on a RUSH basis. If you have questions or would like to get quotes on how to protect your life long work, call or email me directly. My name is Ed Hinerman. Let’s talk.