The nice thing about having your own business is that, at least within the law, no one can tell you how to run it. We can recommend all we want that you flip those burgers just 15 seconds earlier or that you use gluten free beer in your beer battered fish filet, but unless you find that to be useful feedback you, you’re free to chunk it. The same could be true of the CEO of a company as long as the company is making a good enough profit that the board of directors is satisfied.
I’ve shared my opinion on business life insurance with the business world in general and individual businesses for years, completely unsolicited through this forum. I can only speak to the situations where the CEO’s and business partners chose to listen to ideas about life insurance and their business challenges, and the businesses avoided financial catastrophe and in one case the liquidation of a multi million dollar business. As business people we understand the risk of not having certain types of insurance, and in a lot of situations the requirement to have insurance. In the life insurance business I am required to carry Error and Omissions insurance so that if my advice leads to a loss in your business, you can be made whole again. CEO’s are often called upon to carry loan collateral life insurance as a key person on behalf of their company. Banks understand that the death of a CEO can rock the foundation of a business and recovery can take years. Many business loans are approved based as much on the relationship of the CEO with the bank as with the purpose or the numbers behind the loan. And many a company gets stopped in their tracks at that point when the CEO is declined for life insurance.
With a lot of smaller successes through the last 15 years, the best save came in a buy/sell arrangement funded by life insurance between two partners in a lumber business. They had been partners of 35 plus years and read an article I write when they were ages 65 and 75. They were both in good health and the younger of the two was a private pilot who had run into issues before because of his flying. They had their accountant review their situation and decided at that time that $1 million on each was sufficient. We got both of them approved at preferred plus and the policies in force. What this provided was, upon the death of either of them, enough life insurance for the surviving partner to buy out the deceased partner’s portion of the business from his family. We visited annually and five years later they bought another $500,000 of life insurance at ages 70 and 80. This time, due to health, the 70 year old got standard rates and the 80 year old got preferred rates. Three years later the older partner passed away and the younger partner delivered a check to his widow for $1.5 million
Bottom line. It doesn’t cost anything to find out what this kind of protection will cost or if we have the ability to put together a business life insurance package at the last minute if you’ve been declined and need to meet a deadline. Any questions at all please give me a call or email directly.My name is Ed Hinerman. Let’s talk.